Cal. Civ. Code § 250.511c
Bond in Lieu of Escrowing
Operative Text
Every landlord subject to the provisions of this act may, in lieu of depositing escrow funds, guarantee that any escrow funds, less cost of necessary repairs, including interest thereon, shall be returned to the tenant upon termination of the lease, or on surrender and acceptance of the leasehold premises. The guarantee of repayment of said escrow funds shall be secured by a good and sufficient guarantee bond issued by a bonding company authorized to do business in Pennsylvania.
Under 68 P.S. § 250.511c, Pennsylvania landlords who would otherwise be required to hold security deposit funds in escrow have an alternative option: instead of placing those funds in a separate escrow account, a landlord may obtain a guarantee bond from a Pennsylvania-authorized bonding company. The bond must secure the landlord's promise to return the deposit—minus any legitimate repair costs and including any applicable interest—when the lease ends or the tenant surrenders the premises and the landlord accepts it. This provision creates a parallel compliance path that substitutes a bonding company's financial guarantee for the traditional escrow arrangement.
Plain English — not legal advice.
Landlords covered by Pennsylvania's landlord-tenant act who choose the bond-in-lieu option under 68 P.S. § 250.511c generally ensure that the bond is issued by a bonding company formally authorized to conduct business in Pennsylvania. Compliant operators maintain documentation showing that the bond covers the full deposit amount, net of allowable repair costs, plus any interest owed to the tenant. Keeping clear records of the bond's terms and the bonding company's credentials helps demonstrate that the guarantee meets the statutory standard when a tenancy ends.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 68 P.S. § 250.511c, tenants should be aware that their landlord may have secured a guarantee bond rather than placing the security deposit in a traditional escrow account—meaning a bonding company, rather than a bank escrow, backs the landlord's obligation to return the deposit. Tenants retain the same right to receive their deposit back, less documented necessary repair costs plus interest, upon lease termination or surrender and acceptance of the premises. Tenants who believe their deposit has not been properly secured or returned may consider contacting a local tenant-rights organization or consulting with a housing attorney to understand available remedies.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 10, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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