A House committee will discuss a bill that would change the way landlords collect security deposits.
Under Missouri law a landlord can only require a maximum of two months’ rent as a security deposit. State Representative Eric Burlison wants to eliminate that provision.
“Even today some rentals don’t require a full month’s rent for the deposit and that’s because the free market determines what the deposit should be and what the rent should be,” said Burlison. “Right now, by placing that cap, you’re destructing the free market and you’re taking away options from both the renter and the landlord.”
Burlison says while the intention of the current law might have been to prevent people from being preyed upon by landlords, the result is that people are being turned away and left with fewer options. Burlison believes his bill would give tenants with bad credit more flexibility and allow landlords to adjust the deposit.
“There will come a point where the landlord says your risk is too high and therefore I will not rent to you,” said Burlison. “That risk is based by us putting in law a cap on what that risk is. We are basically forcing landlords to say that you cannot take anyone beyond this level of risk.”
Burlison claims someone might have good income and the ability to afford a property, but a landlord might not rent out that property if that person has a history of bad credit due to a divorce or some other circumstance. He suggests that a landlord could adjust the deposit or set up a metric that would allow the deposit to increase based on what a person’s credit score is returned at.
“At the end of the day, the market will bear what the market will bear, and what the best interests of both the tenant and landlord is, is for the state to stay out of it,” said Burlison.