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barristerinky
barristerinky, Attorney
Category: Landlord-Tenant
Satisfied Customers: 33769
Experience:  Attorney for over 15 years, landlord 26 years
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I live in the state of sc. I have a 1 yr rental contract

Customer Question

I live in the state of sc. I have a 1 yr rental contract with a tenant who gave notice on 10/4/15 of moving due to job relocation at the end of the month. According to the contract he is in breach and forfeits his security deposit. The tenant feels that he can legally transfer his deposit to the new tenant that he is recommending. I say that his deposit will not be returned and if I accept the new tenant she will need to make a security deposit. His next question was whether he could remain on the lease and let her rent but he would be responsible so she would not have to pay a security deposit. I don't sublet or permit assignments as of date. My questions are can I withhold the security deposit due to breach
in SC and if I can am I obligated to transfer funds to the new tenant. She is signing a new contract.
Submitted: 1 year ago.
Category: Landlord-Tenant
Expert:  barristerinky replied 1 year ago.

Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.

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My questions are can I withhold the security deposit due to breach in SC and if I can am I obligated to transfer funds to the new tenant.

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If the tenant is breaching the lease, then you can use the security deposit to pay for any damages, cleaning, advertising and delinquent rent for the property so you can re-rent it.

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You are under no legal obligation to transfer the deposit to a new tenant and they are responsible for paying their own deposit required under their lease contract.

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However, if the current tenant is moving out and another tenant is immediately moving in, you can't legally retain the deposit if there are no damages, delinquent rent, or cleaning necessary. When one party breaches, the non breaching party is entitled to be put back in the same position they would have been in but for the breach, not a better one. If you were allowed to keep the current tenant's deposit (assuming no damages) you would be unjustly enriched because you have not suffered any damages that the security deposit is intended to cover. So if you don't have any damages and the tenant doesn't owe any rent, you can't retain the deposit regardless of what the lease says. Non refundable security deposits are in violation of SC law.

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Quoting SC statute:

SECTION 27-40-410. Security deposits; prepaid rent.

(a) Upon termination of the tenancy, property or money held by the landlord as security must be returned less amounts withheld by the landlord for accrued rent and damages which the landlord has suffered by reason of the tenant's noncompliance with Section 27-40-510. Any deduction from the security/rental deposit must be itemized by the landlord in a written notice to the tenant together with the amount due, if any, within thirty days after termination of the tenancy and delivery of possession and demand by the tenant, whichever is later. The tenant shall provide the landlord in writing with a forwarding address or new address to which the written notice and amount due from the landlord may be sent. If the tenant fails to provide the landlord with the forwarding or new address, the tenant is not entitled to damages under this subsection provided the landlord (1) had no notice of the tenant's whereabouts and (2) mailed the written notice and amount due, if any, to the tenant's last known address.

(b) If the landlord fails to return to the tenant any prepaid rent or security/rental deposit with the notice required to be sent by the landlord pursuant to subsection (a), the tenant may recover the property and money in an amount equal to three times the amount wrongfully withheld and reasonable attorney's fees.

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As an aside, in addition to being an attorney, I have also been a landlord for over 26 years...

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thanks

Barrister

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