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Security Deposit Laws

Be sure to take note of any pre-existing damage to the apartment in order to ensure that you receive your security deposit when you leave your apartment.

What is a Security Deposit

A security deposit is a sum of money that a tenant leaves with a landlord during the period they occupy a rental space. After the rental period is over, the landlord will return the security deposit, sometimes deducting amounts needed to clean or repair the rental unit.

Security deposit laws protect the rights of both tenants and landlords. When a tenant enters into a rental agreement, a security deposit clause is usually an important part of the contract. A security deposit provides the landlord with assurance that if the tenant defaults on rent or damages the property, the landlord can use the money to recoup the lost rental income or fix the damage.

Typically, a landlord can charge a tenant a security deposit that amounts to one to two times the rent. A tenant, however, is entitled to the return of any unused portion of the security deposit when the rental agreement terminates.

Inspect the Property Prior to Moving In

It is important for a tenant to document the condition of the rental property prior to moving into the unit. While several states require a landlord to create a "move-in statement," security deposit laws in other states do not have this requirement. A move-in statement typically consists of a detailed list of the existing damage to the rental unit.

If a state does not require a move-in statement, a tenant can document the condition of the property by inspecting it for damage. A tenant should examine the property for large holes in the wall, damage to the carpet or floor, and should make a note of the condition of the appliances. A good inspection will provide detailed information about the damage, the location of the damage, and may include photographs and video of the premises. The landlord and the tenant should both sign the inspection report and each should receive a copy.

How a Landlord Can Use a Security Deposit

Each state has different security deposit laws that regulate how a landlord can use the money. Most states prohibit use of the security deposit to cover the cost of "normal wear and tear." Normal wear and tear refers to the ordinary wear that occurs through regular use. Normal wear and tear excludes such conditions as cigarette burns in a carpet, water damage to a floor, or broken tiles on a kitchen counter. Essentially, damage that exceeds the wear that would ordinarily occur over time is excessive and the landlord can use the security deposit to make repairs. A worn out pathway in a carpet or small nail holes in the wall, on the other hand, are not excessive damage.

In most states, a landlord can use the security deposit for the following purposes:

  • To repair damage not resulting from normal wear and tear
  • To clean the rental unit
  • To cover the cost of a tenant's default on rent

Inspect the Property after Moving Out

The best way to protect a security deposit is to inspect the property after moving out of the rental unit. Some states have laws that require the landlord to notify the tenant of a scheduled inspection and to provide the opportunity for the tenant's presence during the inspection. Other states do not have this requirement, but the tenant can protect his or her security deposit by conducting an inspection that is similar to a move-in inspection. The tenant should take notes of normal wear and tear, damage exceeding normal wear, and should use photographs to document the property'scondition. The tenant should provide the landlord with a copy of the inspection notes.

Recovering the Security Deposit from the Landlord

Every state's security deposit laws have guidelines on how long a landlord has to return a tenant's security deposit. A landlord must typically provide the tenant with an itemized statement of the repairs made. If a portion of the security deposit remains after deducting the cost of repairs, the landlord must return it to the tenant. Most states require the landlord to return the security deposit to the tenant within 14 to 60 days. A tenant should provide the landlord with a new address. This will ensure that the landlord can send the unused portion of the security deposit to the tenant after the rental unit is repaired and cleaned.

Taking a Landlord to Small Claims Court

If a landlord fails to return a security deposit or fails to provide the tenant with an itemized list of deductions, the tenant may sue the landlord in small claims court. If their suit is successful, a tenant may be able to recover monetary damages that amount to two to three times the security deposit, court costs, and attorney fees.

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