By:  Trev E. Peterson

The Legislature made significant changes to two provisions of the Residential Landlord Tenant Act. LB 433, which was passed in May and will be effective on September 3, 2019, made changes to a residential landlord’s duties regarding accounting for and returning tenant deposits and extended the cure period on three day notices for the failure to pay rent.

The three day notice requirement under §76-1431(1) for failure to pay rent has been increased to seven days. For residential landlords that means that your forms should be changed to give the residential tenant seven days to cure the default by paying delinquent rent. This change is important because the forcible entry case cannot be filed until after the seven day notice has expired and the tenant has not cured the default. While this change may not be significant to residential landlords, it should be noted since the notice to cure is required in all forcible entry cases.

The residential landlord’s duty to return the security deposit was also changed. Under existing law the fourteen day period to return the deposit began to run upon the tenant’s demand and designation of the location where payment should be sent. That has been changed. Landlords of residential property are now obligated to send the refund, if any, and an itemization of the application of the deposit to unpaid rent, other charges and any damages, to the tenant by first class mail to the tenant’s last known mailing address. That may, in many cases, be the rental unit just vacated by the tenant. If the mailing is returned as undeliverable or if the returned balance remains outstanding thirty days after the mailing then the landlord shall remit the outstanding balance of the security deposit to the State Treasurer. The unpaid deposit has to be sent to the State Treasurer no later than sixty days after the date of the mailing of the initial notice to the tenant.

This change is significant for three reasons. First, the residential landlord is obligated to send a notice without any action on behalf of the tenant. The other obligations of the landlord are tied to the date the notice is mailed. To prove compliance with the act, the landlord should retain proof of the mailing date. If the mailing is returned, then the landlord has to send the refund to the State Treasurer, and the mailing to the State Treasurer has to be completed within sixty days from the date of the original mailing. If the check remains uncashed (but the postal service has not returned the mailing containing the notice) for thirty days after the notice was mailed, then the landlord has to send the refund to the State Treasurer. As a practical matter this means that the landlord will have to put a stop payment on the check to the tenant if it is not cashed within thirty days from the mailing to the tenant.

Here are the important deadlines:

  • Deadline:  No later than 14 days after tenancy is terminated
    • Action:  Mail written itemization of any charges to the security deposit and the balance of the security deposit to the tenant at last known address
  • Deadline:  If mail returned, and a balance is due, within 60 days after initial mailing
    • Action:  Send the balance of the security deposit to the State Treasurer. There is no requirement that the landlord send a written itemization to the State Treasurer.
  • Deadline:  If a balance is due and the check has not cleared within 30 days from the date of the initial mailing
    • Action:  Send the balance of the security deposit to the State Treasurer. The best practice is also to stop payment on the check issued and mailed to the former tenant so that the former tenant does not get the refund twice. The statute does not address the issue of whether the landlord can charge the stop payment fee to the tenant.

The changes go into effect on September 3, 2019. The changes apply only to residential leases, so commercial and farm leases are not affected by the changes.

 

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