Residential Rentals are HOT – Part III – Rent Escrow

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 which apply to any condition of the residential premises that could materially affect the health and safety of an occupant.

If a tenant wants to pursue escrowing rent, there is a specific process that must be followed.  First the tenant must give the landlord written notice of the issues that the tenant believes constitute non-compliance. The landlord is given 30 days from receipt of the notice to complete normal repairs but 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.  For example, if the tenant letter is provided to landlord on a non-emergent repair on April 15^th, and rent is due at the first of the month, the tenant must pay the landlord rent on May 1^st, even if the repair has not been completed.  If on May 15^th the repair still has not been completed, the tenant may then post the June 1^st rental payment with the Court.  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.

Note: A tenant that abuses the rent escrow process or acts in bad faith may be liable to the landlord for damages and attorney’s fees.  Additional information on the rent escrow process and sample forms can be found at www.ohiolegalservices.org.