Every seasoned renter is familiar with the security deposit. And yet, there always seem to be questions about it when the end of a lease nears. As a renter, you should be fully aware of your financial obligations and renter rights when it comes to your security deposit. To help you navigate this topic, we’ve made this easy-to-use guide that will answer all your biggest questions. Read on to learn everything you need to know about your security deposit.
A security deposit is a refundable amount of money that a renter pays to a property owner or property management company. They typically pay it upon signing their lease to secure the rental property. This signals to the property owner the person will follow the provisions in the lease and pay rent on time. Security deposits differ slightly from other fees you may pay when signing the lease, such as administrative fees, first and last months’ rent, or fees for a background check. These are refundable fixed amounts that the property manager keeps throughout your entire lease, and they’re only able to cash them at the end of your lease to repair damages and clean the property after you leave it. They have a legal requirement to return any money they don’t use for these costs.
Generally speaking, a security deposit is often a reflection of your monthly rent. Many property managers make the security deposit a full month’s rent. For example, if you pay $1,000 per month in rent, you might also pay a $1,000 security deposit before moving in. However, other property managers may choose to charge more and request two months of rent, while others may only ask for a flat amount, such as $500. It’s best to prepare for a higher security deposit when budgeting for a new apartment to ensure you can meet the requirements when the time comes.
Security deposits are refundable, and the goal is for the renter to receive theirs back in full so long as they meet all the terms and agreements of the lease. If you and your property owner that the apartment is in the condition it was in prior to move-in, then the security deposit will, in theory, go back to you in full. Again, it’s really important to read through the lease and know what your property manager expects upon move-out so that you can get your full security deposit back. For example, the lease may state that the property owner will use your deposit for cleaning fees and outline the damages they may fix using the money from the deposit.
Most property owners, however, account for normal wear and tear. For example, they understand paint on the walls may fade from the sunlight or carpets may have some natural indentations from furniture and foot traffic. However, cleaning regularly, communicating with your property owner about damages, and being mindful of how you treat the space may help ensure you receive as much of your deposit back as possible.
Can property owners use a security deposit for unpaid rent? Yes, your security deposit remains with your property owner until you have cleaned and vacated the unit. It will not be back in your possession until you have met all requirements of your lease termination, such as returning the keys, cleaning the unit, and paying your last month’s rent. If you have unpaid rent, your security deposit will be used to pay any outstanding costs.
When renting an apartment, one crucial aspect to consider is the security deposit. As a tenant, it’s essential to understand the landlord’s legal responsibilities in safeguarding your security deposit and complying with state laws. Here, we will explore what landlords are legally required to do with security deposits and provide examples of state laws that protect tenants’ rights.
Landlords have a legal obligation to handle security deposits in a responsible manner. Generally, this involves keeping the deposit separate from personal funds and placing it in a designated account, such as an escrow or trust account. The purpose of this separation is to ensure that the funds remain accessible for refunding the deposit at the end of the lease term or in case of any lawful deductions.
In many jurisdictions, landlords are required to provide written notice to tenants within a specified time frame after receiving the security deposit. This notice typically includes important details such as the amount of the deposit, the account where it is held, and any applicable interest rates. It’s crucial for tenants to carefully review this notice and retain a copy for their records.
Some states have laws that require landlords to pay tenants annual interest on their security deposits. The interest rates and specific conditions for earning interest vary by state. It’s advisable to research your state’s laws to determine if your security deposit is eligible for interest and how it should be calculated.
Each state has its own set of laws governing security deposits. Let’s look at a few examples:
Remember, these examples are not exhaustive, and it’s important to consult your specific state’s laws or seek legal advice to fully understand your rights as a tenant.
Here are answers to some of the most frequently asked questions about security deposits to help you learn more:
Do you pay a security deposit before signing a lease?You will usually have to pay a security deposit at the same time you sign the lease. Do not pay the security deposit without first reviewing the lease, and be wary of property owners asking for payment before you see your lease.
Do I have to pay the security deposit and first month’s rent at the same time?It’s up to your property manager, but often the answer is yes. Property managers need the security deposit so that they know you’re locked in for the rental lease and have it in their possession in case you incur any damages to the unit. Likewise, they’ll need your first month’s rent upfront to ensure that you can pay rent every month. Check with your property manager to see if this is the case, and be prepared to pay both the security deposit and your first month’s rent concurrently.
When will I get my security deposit back?Each state has varied specific requirements for when it requires property owners to return security deposits to their renters after moving out or at the end of the rental agreement, but generally, no states have more than a 60-day return time. For example, many states like California and Washington require it to be returned within 21 days, and states like Ohio and Massachusetts give property owners 30 days. However, New York is a rarity, requiring it to be returned in 14 days. If your property owner doesn’t abide by your state’s laws, you may have options to pursue legal action.
What happens if I don’t get my security deposit back?There are different options available to you if you don’t receive your security deposit back. Start by reviewing your leasing agreement to confirm when your property manager stated you can expect to receive your security deposit back. You can also reference this guide.
Can my property owner charge me more than my security deposit?Yes, if your property owner decides that you have caused damage to your unit that exceeds the amount of your security deposit, they have the legal right to charge you for the damages. To avoid this, make sure you don’t create any major damage to walls, flooring, or railings, report all broken appliances before move-out, and patch up any small holes in your walls where you’ve hung pictures. It’s also important to be familiar with the renter rights in your state if you feel your property owner is charging you excessively or unfairly.
Can I dispute how much of my security deposit my landlord refunds?As a renter, you’re able to dispute how much of your security deposit your landlord or property manager gives back to you if you feel the amount they withheld is unfair. Before you move in, take pictures of your new home, especially appliances, floors, ceilings, blinds, and any other pre-existing damage in the rooms, and document what you find with the property manager.
When you move out, request an itemized list from your move-out inspection, and reference your move-in photos for any charges you consider wrongful. In some instances, you may need to consult with a legal professional if your property manager is uncooperative about your dispute.
Does breaking your lease affect your security deposit?While renters may choose to break their leases for a variety of reasons, property owners often include provisions in leasing agreements to protect themselves in case it happens. Many of them state that they have the right to keep the security deposit in full if the renter breaks their lease, and they may specify whether they keep it in full or in a partial amount. Review your lease carefully before deciding to break it.
Reviewing your lease carefully before signing it is essential. This tells you what the property manager requires as a security deposit and often outlines when you can expect it back from them once your lease ends. As you’re reviewing the lease, be sure to note anything you’re uncertain about to ask the property manager. We hope this guide helped you learn all about security deposits, and we encourage you to ask your property owner if you have any questions about your own deposit.
Julie is an avid sports enthusiast, beer drinker, city runner, and non-fiction reader. She's been a renter for 10 years, and has learned a thing or two in the process.