New Security Deposit Case for Landlords

A case tenants need to read.

High court rules on landlord-tenant dispute

Landlords must refund a security deposit and can't get money back for property damage if they don't adequately or timely notify tenants about those claims, but landlords can still recover unpaid rent and other losses, the Indiana Supreme Court ruled today.

In a landlord-tenant dispute involving Indiana's statutes on back-rent payment and return of a security deposit, justices ruled 4-1 in favor of the landlord in Stan Klotz v. Sarah Hoyt and Chrissy Kornmann, No. 18S02-0807-CV-391.

Tenants Sarah Hoyt and Chrissy Kornmann had entered a yearlong rental agreement in July 2006, paying Stan Klotz a $600 security deposit and rent for July and half of August but made no other payments. The court shows they stopped living there sometime in August or September 2006, and the landlord sent a letter about the intent to start eviction proceedings that November because of their non-payment of rent. They didn't respond, and he filed a small claim in January 2007. Klotz presented evidence that the total amount was almost $11,919 in unpaid rent, late fees, damages, and attorney fees, but he asked the court for a judgment of $6,000 - the small claims' statutory limit.

Delaware Circuit Judge John Feick dismissed Klotz's breach-of-lease complaint in 2007, but early last year an Indiana Court of Appeals panel reversed that decision in Klotz v. Hoyt, 880 N.E.2d 1234, 1235 (Ind. Ct. App. 2008) and remanded with instructions to enter judgment in favor of the landlord for $6,000.