dissenting. I respectfully dissent because I believe that the majority decision effectively emasculates the Landlord-Tenant Act (“Act”) and clearly subverts the legislative pronouncement and intent. Today’s decision permits every landlord, so inclined, to withhold refund of security deposits, secure in the knowledge that this court has held that the clear mandates of the statute can be ignored with impunity.
The majority properly sets forth the mandatory provisions of R.C. *305321.16(B) and points out that “[t]his itemization and identification of the deductions must be submitted in writing in a notice delivered to the tenant, ‘together with the amount due’ the tenant. This dictate shall be accomplished by the landlord within thirty days after termination of the rental agreement and delivery of possession.” (Emphasis added.) Having noted this mandatory statutory provision and accepting, by the above language, its existence, the majority then promptly discards the precepts of the statute and ignores its clear proscriptions. The majority then sets forth the provisions of R.C. 5321.16(C) and, thereafter, completely disregards the language, “[i]f the landlord fails to comply with division (B) of this section.” It is respectfully submitted that therein lies the misdirection of the majority decision.
Before the passage of the Act, tenants were often exploited by landlords who withheld security deposits with the knowledge that tenants would waive their rights rather than involve themselves in a legal process where the expense invariably exceeded the amount of the deposit. The purpose of considering the question of security deposits in landlord-tenant legislation was to insure the proper administration of such deposits by means of procedures designed to encourage tenant pursuit of legal remedies. Previously, upon performance of a lease or tenancy, the tenant was entitled to the return of the balance of the security deposit remaining after retention by the landlord of any amount to satisfy any rent owed or damages caused by the tenant. Cain v. Brown (1922), 105 Ohio St. 264. Even prior to the Act, then, the deposit was not forfeited. If the tenant sought to have the deposit returned (where there was no rent owing and no damage done), then the tenant would have to bring an action to recover the deposit, upon refusal to refund after proper demand. This clearly necessitated and promoted litigation.
The Landlord-Tenant Act was enacted in Ohio to prevent such needless litigation. Its purpose, with regard to the matter before us, is to require the prompt itemization of deductions and to further good faith negotiations, as opposed to litigation between the parties. With all of the complaints heard today about our litigious society, it seems strange that this court would render a decision which encourages litigation when a plain and literal reading of the statute provides a clear determination concerning a security deposit arising out of a landlord-tenant relationship.
R.C. 5321.16(B) contains language which mandates certain actions by both a tenant and a landlord. Simply ignoring the section does not make it go away. This section, in part, determines that the tenant “* * * shall provide the landlord in writing * * * a forwarding address * * (Emphasis added.) Furthermore, any deductions by the landlord from the security deposit “* * * shall be itemized and identified by the landlord in a written notice delivered to the tenant together with the amount due, within thirty days after termination of the rental agreement and delivery of possession.” (Emphasis added.)
*31There is no dispute in this case that the tenant complied with R.C. 5321.16(B) and the landlord did not comply. R.C. 5321.16(C) then mandates that “[i]f the landlord fails to comply with division (B) of this section, the tenant may recover the property and money due him, together with damages in an amount equal to the amount wrongfully withheld, and reasonable attorneys fees.” (Emphasis added.) At this point it should be stressed that the deposit belongs to the tenant — not the landlord! Thus, at the expiration of the lease term, plus thirty days as provided in R.C. 5321.16(B), the “money [is] due him [i.e., the tenant].”
It should also be noted that the statute does very little to discourage excessive security deposits. Furthermore, there is no requirement that security deposits be placed in a separate account or in escrow so as to protect tenants from possible landlord insolvency or conversion. Beyond assuring equitable disposition of security deposits following termination, the Act does not regulate to any significant extent the landlord’s use of such funds during the tenancy. In short, the systematic collection of security deposits provides for a landlord a source of free loans (except for the nominal restriction found in R.C. 5321.16[A]).
In the case before us, the appellants gave appellee a security deposit in the amount of $325. It is appellants’ contention that upon non-compliance of appellee with R.C. 5321.16(B), on the thirty-first day after termination of the rental agreement and delivery of possession, appellants were entitled to the return of the deposit ($325) plus, pursuant to R.C. 5321.16(C), an amount equal to the sum ($325) wrongfully withheld or an additional $325. Appellants concede that the appellee would still retain his cause of action for any rent still due or for damage caused to the property. In this regard, I am persuaded by the well-reasoned opinion and language of Judge Krenzler in Sherwin v. Cabana Club Apartments (1980), 70 Ohio App. 2d 11, 18 [24 O.O.3d 11]:
“Thus, based on our interpretation of the statute, the landlord’s obligation to either return the security deposit or provide notice and an itemization of deductions from the security deposit is not relieved merely because he has a damage action. If the landlord wishes to bring an action for damages, he must maintain it in a separate action or as a counterclaim in the tenant’s action to recover his security deposit.
“The Landlords and Tenants Act provides for certain rights and responsibilities for tenants and landlords. See R.C. Chapter 5321. The Act attempts to balance the rights of tenants and landlords. As we have noted, the tenant’s compliance with R.C. 5321.16(B), combined with the landlord’s failure to comply, triggers significant rights for the tenant. However, if a tenant causes physical damage to the property, the landlord may seek recovery for this damage. See R.C. 5321.05 and 5321.12. The fact that the landlord does not comply with R.C. 5321.16(B) does not preclude him from seeking damages under R.C. 5321.05 and 5321.12. These are separate and independent provisions of the Landlords and *32Tenants Act, and the recovery of damages by the landlord is an independent right providing for the recovery of damages to the property.”
Accordingly, I would find for the appellants in the amount of $650 and enter a setoff for any sums found to be due appellee upon his counterclaim, as I am unable to find in the statute any provision that excuses the landlord-appellee from complying with his responsibility under the statute simply because he unilaterally determines that the amount of damages owed to him by the tenants-appellants is greater than the security deposit held by him.
The final issue before us regards the awarding of, and entitlement to, attorney fees in cases involving wrongful withholding of security deposits. The question arises as to whether in applying R.C. 5321.16(B) and (C), the award of fees is mandatory or discretionary. It is submitted that these provisions in the Act are designed to ensure the return of security deposits, wrongfully withheld, at no cost to the tenant. Understanding this, it is my view, as it was the view of the Sherwin court that where a landlord fails to return the security deposit of a tenant who has left a forwarding address, and ignores the statutory requirements of notice and itemization of damages, an award for reasonable attorney fees is mandatory.
Upon reflection, I suspect that my over-concern is unwarranted. Knowledgeable tenants and their lawyers will find a way to circumvent today’s decision. I would guess that tenants will simply use their security deposit as their last month’s rent, even though that may be in violation of their tenancy or lease agreement. This course of action would then place upon the landlord the burden and legal expense of seeking out the tenant for any remaining rent due or for damage caused to the leased premises, rather than place the burden upon the tenant to recover the security deposit.
In my view, it would be infinitely preferable just to follow the mandates of the statute, rather than to require, in effect, one of the parties to commence litigation — the tenant to recover the deposit or the landlord to recover rent and/or damage compensation.
Accordingly, I would reverse the judgment of the court of appeals.
Locher and C. Brown, JJ., concur in the foregoing dissenting opinion.