Can a landlord legally withhold deposit b/c the PG&E hasn't been paid yet?

Question

The lease stipulates that the tenants are responsible for all utilities. PG&E wont let us pay our bill until the next billing cycle, which exceeds the legal limit of the time allotted for the landlord to send us our deposit. She claims she can withhold our deposit indefinitely until the PG&E is paid.

I've read through the entire lease and I see nothing that says she can does this with our deposit because of a bill we are responsible for (and it is not even a delinquent bill).

Answer 1

Seems tricky for her to do this.  It's probably legal if she quickly refunds the money from your deposit. Ask if you can prepay (and overpay) the electric bill.

Answer 2

Your landlord doesn't have to return your deposit until obligations have been met. You need to call PG&E, tell them your move out date, they are required to get a meter reading and send you a final bill. You shouldn't have to wait until the next billing cycle.

Answer 3

Generally speaking, the landlord may withhold your deposit until you have created a release for all obligations against the property you are renting.  There are different rules in the various states based upon those states definitions of "obligations."  If you leave without clearing all of your obligations, regardless of the reason, then it is possible that the landlord will be held accountable.  I suspect that if you clear the PG&E bill, the landlord will be obligated to refund the deposit that was withheld because of that bill.

Answer 4

I don't think she can, but that might be a call for a judge to decide.  Usually, the state says a LL has to send the accounting of how the SD was used within 30 days.  

She could pay the bill with the SD, then send you a statement indicating what it was used for.  If the SD covers it, she could send you the balance.  If not, she'd have to sue you for the rest.

There are a lot of LLs out there that don't follow this rule correctly.  But, the only way to get your SD, might be to take her to court.

Good Luck.

Answer 5

In general no, the landlord’s lease may never override state statute, so what ever time limit your state requires the landlord to return the security deposit minus any deductions is the controlling authority the landlord can not by lease extended that time frame, the time starts when you move out not when the landlord receives the last bill

What is your recourse? To sue in small claims

Answer 6

I'm not a lawyer, so this isn't legal advice. However...

If the lease stipulates that the tenants are responsible for all utilities, then your landlord is very likely within her rights to withhold your deposit until the utilities are paid.

In addition to that being provided for in the lease, there's also a practical legal reason. In many jurisdictions, unpaid utilities can result in a lien against the property. So, if you happened to move out without paying the full bill, you might be long gone but the owner now would have a lien on the property.

Others here are correct that a lease doesn't take precedence over state or local regulations. But the solution to that is for the owner to withhold the full amount of your utility bill from the security deposit, and to return the remainder within the time frame specified by state or local statute. And if there are other charges associated with that process (including change of account processing fees) or any penalties, the owner would be justified in withholding those, as well...since you'd been responsible for them.

Check with PG&E again, and see if there's any other way to handle the issue.

Good luck.