Attorney Fees

Full Definition

Attorney fees in security deposit disputes refer to the recovery of the tenant's legal costs from the losing landlord under 'fee-shifting' statutes. Under the American Rule, each party normally pays their own attorney regardless of outcome. However, most state security deposit statutes include a fee-shifting provision allowing the prevailing tenant to recover their reasonable attorney fees and court costs from the landlord. States with strong fee-shifting provisions include California, Massachusetts, Washington, and Florida. This is significant because attorney fees can easily exceed the deposit amount itself in contested cases, making it economically viable for attorneys to take security deposit cases on contingency. The availability of attorney fees also deters landlords from litigating unjustifiable positions and encourages early settlement. Some states award fees only when the landlord acted in bad faith; others award fees to any prevailing tenant. Tenants should be aware that in some states, if the landlord prevails, they may also be able to recover their attorney fees from the tenant.