CT HB05437

Effective January 1, 2012, landlords must pay interest on security deposits at a rate not less than the deposit index for that calendar year, removing the previous minimum floor of one and one-half percent.

Interest accrues annually on the anniversary date of tenancy and must be paid to the tenant or credited toward the next rental payment at the landlord's discretion.

If tenancy terminates before the anniversary date or a deposit is returned early, accrued interest must be paid to the tenant not later than thirty days after termination or return.

Tenants who are delinquent more than ten days on monthly rent forfeit interest for that month, unless a late charge is imposed under the rental agreement instead.

Landlords cannot increase rent on properties subject to these provisions due to the requirement to pay interest on security deposits.