Security deposit laws in every state allow a landlord to collect money from a tenant to repair damage that exceeds normal wear and tear and for unpaid rent. After a tenant moves out of the rental unit, the landlord must return the unused portion of the security deposit to the tenant within a specific time. In some states, a landlord must also pay the tenant interest on the security deposit.
The Move-out Inspection
To assess the condition of the rental unit, the landlord will inspect for damage and cleaning requirements. Oftentimes, the landlord completes the inspection without the tenant present, but in some states tenants have the right to be present at the move-out inspection. A tenant should take advantage of this right or option if it is available.
The landlord may rely on the move-in statement to help evaluate the damage. A move-in statement will provide important documentation of the rental unit's original condition. During the move-out inspection, notes and photos of the premises are used to record the current condition of the rental unit. A comparison of notes and photos from the move-in and move-out inspections will help determine the damage caused by the tenant.
Deduction for Wear and Tear
Security deposit laws allow a landlord to use the deposit to fix damage that exceeds normal wear and tear. In general, a landlord may use a security deposit to restore the rental unit to the same condition it was in before the tenant's occupancy. A landlord cannot charge to fix damage caused by ordinary wear and tear, however.
For example, faded drapery, dirty blinds, or worn pathways in a carpet are the result of ordinary wear and tear. Broken tiles on a kitchen countertop or cigarette burns in a carpet, on the other hand, exceed ordinary use.
If damage or dirt and grime exceed normal wear and tear, the landlord may deduct the cost from the security deposit. When restoring the rental unit, the landlord should not replace the item when a repair is adequate. For example, one broken countertop tile does not merit replacing the entire countertop.
Deduction for Unpaid Rent
Many states allow a landlord to deduct unpaid rent from the security deposit under the following conditions:
Deadline for Returning a Security Deposit
Security deposit laws also regulate the return of a tenant's security deposit. In most states, a landlord must return a deposit within 30 days, but deadlines range from 14 to 60 days. Most state laws require a landlord to mail the following to the tenant's last known address or forwarding address:
The itemized statement should include an explanation for each deduction. For instance, a description of the damage, the required repair, and the cost of making the repair should be included in the statement. If some repairs are incomplete, an estimate of the cost is sufficient. Copies of bills, receipts, and estimates for repairs should accompany the itemized statement sent to the tenant.
Suing a Landlord for the Violation of Security Deposit Laws
A tenant may sue a landlord for a variety of reasons related to security deposits, including the failure to return the security deposit or provide an itemized statement within the time required by law, the failure to pay interest, or to dispute the cost of repairs and/or cleaning. In most circumstances, a tenant will file such a lawsuit in small claims court. In many states, the maximum claim amount for small claims court ranges from $3,000 to $7,500. Claims typically reach trial within 30 to 60 days and representation by an attorney is unnecessary. In many states, a tenant has up to four years to sue over a security deposit dispute.
If a tenant wins the lawsuit, the landlord may be liable for the security deposit withheld from the tenant as well as court costs. If a landlord acted with willful disregard for the law, a court may award the tenant two to three times the amount of the security deposit illegally withheld, plus attorney fees and court costs.