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SB 2973

AN ACT RELATING TO PROPERTY -- RESIDENTIAL LANDLORD AND TENANT ACT

2026 Regular Session Introduced by Jake Bissaillon and 4 co-sponsors

For landlords with six or more units, security deposits must be placed in interest-bearing accounts with all earned interest going to tenants, plus itemized deductions and a 20-day

04/28/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2973

Summary of Bill SB 2973 (Rhode Island, 2026 Session)

Overview

  • Title: AN ACT RELATING TO PROPERTY -- RESIDENTIAL LANDLORD AND TENANT ACT
  • Introduced: March 4, 2026
  • Sponsor(s): Senators Mack, Kallman, Bissaillon, Gu, DiMario (co-sponsors)
  • Committee: Senate Judiciary
  • Effective Date: Upon passage

SB 2973 focuses on the handling of security deposits for residential leases, with a specific requirement for landlords who manage six or more dwelling units to place security deposits into interest-bearing federally insured accounts and to pay out accrued interest to tenants at the end of the tenancy, subject to certain deductions.

1) Purpose and Intent

  • Ensure greater financial protection and potential benefit for tenants by mandating interest-bearing treatment of security deposits for larger rental properties.
  • Establish clear timelines and itemized deductions for returning security deposits.
  • Normalize accounting practices by requiring federally insured, interest-bearing accounts and explicit itemization of deductions.

2) Key Provisions and Changes

A. Security Deposit Amounts

  • A landlord may not demand or receive a security deposit in an amount greater than one month’s periodic rent (same as current baseline).

B. End-of-Tenancy Calculations (Non-Furnished Apartments)

  • At tenancy termination, the tenant is entitled to:
    • The full security deposit amount initially paid, minus:
    • Unpaid accrued rent
    • Reasonable cleaning expenses (if applicable)
    • Reasonable trash disposal expenses (if applicable)
    • Damages to the premises other than ordinary wear and tear resulting from tenant noncompliance with the lease
    • The landlord must provide an itemized written notice detailing these deductions.
  • Timing for notice and payment:
    • Landlord must deliver the notice and the remaining security deposit amount within 20 days after the later of:
    • Termination of tenancy, or
    • Delivery of possession, or
    • Tenant provides forwarding address

C. Interest-Bearing Requirement for Larger Landlords

  • Applicability: Landlords of six (6) or more dwelling units.
  • Account type: Security deposits must be placed in federally insured deposit accounts earning interest at a rate not less than the prevailing market rate for regular savings accounts (as defined by Rhode Island statutes or as adopted by the Department of Business Regulation in coordination with the Department of Housing).
  • Interest ownership: All interest accrued belongs to the tenant.

D. End-of-Tenancy Calculations When Interest is Involved

  • At termination, the tenant’s security deposit payable equals:
    • The initial security deposit plus all accrued interest
    • Minus the same allowable deductions listed above (unpaid rent, cleaning, trash disposal, damages beyond ordinary wear and tear)
    • Minus any other itemized deductions as documented in the landlord’s written notice
  • Timing for notice and payment mirrors subsection B (within 20 days after the later of termination, possession delivery, or forwarding address).

E. Recovery for Non-Compliance

  • If the landlord fails to comply with the above, the tenant may recover:
    • The owed amount plus damages equal to the amount wrongfully withheld
    • Reasonable attorney fees

F. Other Provisions

  • The act does not prohibit other lawful damages to which a landlord or tenant may be entitled under the chapter.
  • Furnished rentals:
    • Landlords may require a separate furniture security deposit if the replacement value of furnished furniture is $5,000 or more.
    • A furniture security deposit may be up to one month’s rent.
    • Return of furniture security deposit follows the same deduction and notice requirements as above.

G. Transfer of Interest

  • If the landlord transfers their interest, the new holder of interest is bound by the security deposit provisions.

H. Anti-Waiver

  • No rental agreement may waive the security deposit provisions.

3) Who is Affected

  • Primary: Landlords with six or more dwelling units who collect security deposits for residential rental properties.
  • Tenants in those properties who pay deposits and may receive interest and a structured, itemized return of deposits.
  • Furnished rentals may be affected if a separate furniture security deposit is used (subject to the $5,000+ replacement value threshold).

4) Procedural and Timeline Aspects

  • Implementation: Takes effect upon passage (no future enactment date).
  • Administrative details: Requires the department of business regulation and the department of housing to determine or concur on the interest rate methodology for deposits.
  • Compliance timeline: Landlords must provide itemized deductions and return the remaining deposit (plus interest where applicable) within 20 days after the later of termination, possession delivery, or forwarding address provided.

Impact Considerations

  • The bill enhances tenant protections by ensuring interest on security deposits for larger landlords and creating a formalized, timely process for deposit returns.
  • It imposes fiduciary responsibilities on landlords regarding deposit handling and interest accrual.
  • It preserves existing rights to recover other damages and to seek attorney fees for non-compliance.

If you’d like, I can provide a side-by-side comparison with the current law or a plain-language FAQ for landlords and tenants.

Compiled from official sources — confirm details with the bill’s official record.

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