What Happens When Tenants Escrow Rent

Industry Articles

Tenant Escrow Rent

Attention all landlords and property managers! There are consequences for failing to keep a rental in good repair or otherwise abide by the terms of the lease. Under certain circumstances, a tenant may escrow rent with the county clerk of courts rather than pay the rent to the landlord. The tenant can withhold rent, if:

  • Landlord fails to fulfill any obligation imposed upon it by RC 5321.04 (Landlord Obligations)
  • Landlord fails to fulfill any obligation imposed upon him by the rental agreement
  • The conditions of the premises are such that the tenant reasonably believes that the landlord has failed to fulfill any such obligations
  • A government agency has found that the premises are not in compliance with building, housing, health, or safety codes. These codes apply to any condition of the residential premises that could materially affect the health and safety of an occupant.

Last year there were about 18,000 evictions in Franklin County Municipal Court. Many of the evictions may have been the result of a tenant refusing to pay rent due to a landlord’s failure to make repairs or meet other obligations. Unfortunately, a tenant’s failure to pay rent is grounds for granting an eviction, despite landlord misconduct. The proper method for addressing landlord’s actions (or inactions) is to escrow rent with the court. The process is described in greater detail below.

If a tenant wants to pursue escrowing rent, there is a specific process that they must follow. First, the tenant must give the landlord written notice of the issues that they believe constitute non-compliance. The landlord is given 30 days from receipt of the notice to complete normal repairs. However, they must complete emergent repairs within 5 days (such as no running water, heat or electric).

If the repairs are not completed, the tenant may escrow or deposit their rent with the Clerk of Courts for the county in which the property is located. Keep in mind if the tenant has a rent payment due during the 30 day period, the rent payment must be timely paid to the landlord. It is only after the lapse of the 30 day period (or 5 days in emergent cases) that the tenant may pursue escrowing with the court. After the tenant deposits rent with the Clerk of Courts, the Clerk of Courts will also give written notice to the landlord. (Note: if a landlord fails to give a tenant written notice of his or his agent’s name/address, the landlord waives the right to receive written notice of rent escrow).

After a tenant deposits rent, the landlord may:

Apply to the Clerk of Court for release of rent on the ground that the condition contained in the notice has been remedied, or

Apply to the Clerk of Court for release of the rent on the ground that the tenant did not comply with the notice requirements of the statute, or that the tenant was not current in rental payments due under the Lease at the time the tenant initiated rent deposits, or

Apply to the court for the release of the rent on the ground that there was no violation of any obligation imposed on the landlord.

Tenants should be cautioned to always act in good faith and not abuse the rent escrow process, otherwise they face damages and attorney’s fees. The Columbus Bar Association has a referral service to attorneys that practice in the area of landlord tenant law. For more information, go to www.cbalaw.org.