Important Changes for Residential Leasing
July 1, 2013
Publication| Real Estate Services
On June 27, 2013, Governor Markell signed into law House Bill No. 92, as amended, which allows for alternative means of establishing security deposits for residential tenants. The Act now expressly authorizes the recent practice among landlords of residential projects to purchase what is essentially a surety bond to achieve the same purpose and effect as a security deposit. Rather than paying a cash security deposit to the landlord, the tenant (with the landlord’s consent) instead pays the landlord the premium for this surety bond. This benefits the tenant because the cost of the premium is generally significantly less than the amount required for a security deposit. The issuer of the surety bond is then the party liable to the landlord for rents or damages that would have been covered by the cash security deposit if the tenant had failed to pay. The Act was effective when signed by the Governor.
In addition, on June 26, 2013, Governor Markell signed into law House Bill No. 70, which affects residential tenants in Delaware. The Act prohibits tenants from removing or tampering with properly functioning smoke detectors or carbon monoxide detectors installed by the landlord. The Act, which recognizes the importance of properly functioning smoke and carbon monoxide detectors in keeping tenants safe, was effective when signed by the Governor.