PA Law Question - Security Deposit

[Marty Gold]

The PA law reads, "

"Escrow Funds Limited:

(a) No landlord may require a sum in excess of two months' rent to be deposited in escrow for the payment of damages to the leasehold premises and/or default in rent thereof during the first year of any lease.
(b) During the second and subsequent years of the lease or during any renewal of the original lease the amount required to be deposited may not exceed one month's rent."

Can anyone explain (b) to be please?  If someone rents using a 1 year lease and I charge a 2 month security deposit, is (b) saying I must return 1 month (half in this case) if that same person renews the lease for a second year?    Or is (b) saying on that renewal lease that I may charge an additional security deposit of 1 month's rent, above the 2 month's deposit which I already am holding?

Thank you 

[Chris K.]

Not sure if there is any caselaw on this topic, but I always understood it to mean scenario 1. In other words: 

1. You rent your property for $1,000 a month on May 2017. From May 2017 to 2018, you can require the tenant to provide you with $2,000 for security deposit. 

2. On May 2018, you and the tenant agree that the rent should increase by $100 a month each year. On May 2018, you may charge up to $1,100 for security deposit. Assuming you didn't have to use the $2,000 security deposit during the first year, you must return $900 to the tenant. 

3. On May 2019, rent increases again to $1,200. Assuming you didn't have to use the security deposit, you can ask for $100 more. Now you have $1,200 in security deposit.  

4. This pattern continues until May 2022. At that point, the tenant has possessed the unit for five years. Starting with the lease that begins on May 2022, you can still increase the rent but cannot increase the security deposit any higher. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us.I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.