Keeping a Security Deposit If a Tenant Abruptly Moves Out

Let’s consider a situation in which a Section 8 tenant is abruptly moving out and hasn’t given 30-days’ notice as stipulated in the HUD Model Lease. Can the site keep the deposit? Has the tenant forfeited her security deposit for violation of a lease term? Does state law apply here, or is there anywhere in HUD regs that addresses this scenario?

With regard to security deposits, state law and local laws prevail in all such cases. Subject to state and local laws, an owner may use the tenant's security deposit as reimbursement for any unpaid rent or other amounts the tenant owes under the lease.

Paragraph 8a of the HUD Model Lease allows an owner to keep the deposit if the notice is not fulfilled provided there are no reasons beyond the resident’s control such as being moved to a nursing home. Based on this clause, unless prohibited by state or local law, the owner may retain the security deposit for the tenant's failure to provide the proper notice. The clause states that the tenant will be eligible for a refund of the security deposit only if the tenant provided the landlord with the 30-day written notice of intent to move required by the Model Lease, unless the tenant was unable to give the notice for reasons beyond his or her control.

In this situation, an owner may be tempted to require the tenant abruptly moving out to pay market rent. However, unless the owner has another reason to terminate the assistance, the resident will remain an assisted resident until she moves out. Failure to provide a 30-day notice of vacating a unit is not one of the HUD-approved reasons for requiring that a tenant pay market rent.