Rent and Security Deposit Laws

A security deposit is money a tenant pays their landlord as financial protection against excessive wear and tear. The tenant pays the security deposit before or at the start of their lease. After the lease ends, the landlord must return the money to the tenant, minus any itemized deductions. State laws dictate when landlords must return the security deposit after the lease ends.

This article explains what rental property owners and renters should know about rent and security deposit laws. If you’re a landlord or tenant with a rent or security deposit issue, legal help is available. A local attorney can assess your situation, explain how state laws apply, and recommend next steps to protect your rights and interests.

Landlords and Security Deposits

Landlords often ask for a security deposit and the last month’s rent before a tenant moves into a rental unit. These funds cover the landlord’s costs if the tenant moves out early or doesn’t clean before vacating. After the rental period ends, landlords must return the security deposit, minus the amounts they used to repair the rental unit.

The law and the residential lease agreement are two sources of authority for security deposits.

State security deposit laws regulate how landlords handle a tenant’s security deposit. Many states require landlords to keep security deposits in an interest-bearing account. In some states, like Maryland, landlords use an escrow account to hold the money. Other states limit the amount a landlord may request as a security deposit.

For example, landlords can charge up to two months’ rent for an unfurnished rental property in California. Moreover, California landlords must return the security deposit within 21 days of move-out.

Security Deposit Limitations

State security deposit laws also limit how much landlords can collect. In some states, like Maryland, landlords generally cannot ask for more than one month’s rent as a security deposit.

Landlords can usually collect the last month’s rent upfront in addition to or instead of a security deposit. However, they cannot use the last month’s rent to cover end-of-lease damages, as they can with a security deposit.

Higher Security Deposits

During screening, landlords can check a potential renter’s background, including their credit score. Some landlords offset potential risks by asking for a higher security deposit.

Landlords and Rent

The purpose of renting out property is to generate income. The landlord sets the rent amount, and the tenant pays it per the rental agreement. Nonpayment of rent can lead to eviction, which is time-consuming and often expensive. To avoid confusion about rent payments, landlords and property management companies can take steps to ensure rent is paid on time and in full.

Eviction is a legal process that requires several steps. A misstep can harm your business, expose you to legal trouble, and cost you money. Find local legal help.

Lease agreements should outline the following items:

• The rent amount
• Rent due date
• Method(s) of payment
• Late fees, if any

Make sure the tenant receives a receipt every time they pay rent. This can help prevent disputes.

Renters and Security Deposits

Most landlords require a deposit before the lease starts. Most states require landlords to keep this money in an interest-bearing bank account. The tenant gets any interest collected during the lease term.

Rent Receipts

As a tenant, do not make assumptions. Get a written receipt for the security deposit and last month’s rent, if applicable.

The written receipt should include the following:

• Amount paid
• Date of payment
• Purpose of the payment (i.e., “security deposit“)
• The names of the parties involved
• The landlord or property manager’s signature

Tenant Move-In

Note the condition of the rental unit before moving in. Take photographs where necessary, document any issues, and have the landlord sign off. That way, the landlord cannot charge you for damage that existed before your lease.

Moving Out: Final Inspections

Renters have several responsibilities when they are moving out of a rental property. First, they must give the landlord written notice that they are vacating the unit. This notice should include:

• The date the renter is leaving
• A forwarding address where the landlord can send the security deposit
• Proposed times for a final inspection

Renters should schedule a final inspection before they move out of a rental property. Some states, like Maryland, have laws governing a final inspection. In Maryland, landlords must notify tenants at least 15 days before the renter leaves of the date and time of the final inspection via certified mail. Additionally, the inspection must occur five days before or after the move-out date.

In states without any requirements, renters should conduct their final inspection. They should create a move-out inspection record through pictures, video, and detailed notes. Photos and videos help document the property’s condition. The tenant should note normal wear and tear and damage beyond normal wear, then provide the landlord with a copy of the inspection notes.

Normal wear and tear excludes conditions like:

• Cigarette burns on a carpet
• Water damage to a floor from the tenant’s neglect
• Broken tiles on a kitchen counter

Damage beyond what would occur over time is not normal wear and tear. The landlord can use the security deposit to repair actual damages.

Landlords may also use the security deposit to clean the rental unit or cover unpaid rent.

Return of Security Deposit

At least a few weeks before the end of the tenancy, the tenant should give the landlord written notice of their move. This allows the landlord to prepare for a subsequent tenant and to release the security deposit.

To collect their full security deposit, tenants should follow their lease and local law. This includes cleaning the rental property and completing a move-out inspection with the landlord. They should take photos or a video to support the assessment. If you do not clean the apartment or if you cause property damage, the landlord may use the security deposit to cover repair costs.

In many states, landlords must return the security deposit within 14 to 45 days after move-out. The tenant must provide the landlord with a new address to return the security deposit and interest. In many month-to-month leases, landlords must return the security deposit within 30 days.

If the landlord doesn’t return the security deposit or provide an itemized list of deductions, the tenant may seek relief in small claims court. If successful, the tenant can recover two to three times the security deposit, court costs, and attorney fees.

Security Deposit Deductions

If the landlord deducts from the security deposit, they must give the tenant an itemized statement. That statement should include the damage and the cost of repairs deducted from the security deposit. Landlords must return any unused portion of the security deposit to the tenant.

Possible deductions include:

• Unpaid rent
• Unpaid utilities
• Property damage (beyond ordinary wear and tear
• Professional cleaning

Once the tenant receives your security deposit, check any deductions, and ensure your landlord has included any accrued interest. If you have any issues with getting your security deposit back, you can sue your landlord in small claims court.

Get Legal Help With a Rent or Security Deposit Issue

Disputes over security deposits and rent payments are not uncommon in landlord-tenant law. As an owner, you depend on rental income to cover your expenses, and responsible tenants expect their security deposit to be returned on time and in full. If your landlord won’t return your security deposit or you’re a rental property owner in a dispute with your tenant, a qualified landlord-tenant attorney can help. 

FindLaw’s directory of attorneys can connect you with qualified legal help near you. Enter your legal issue and city or ZIP code for a list of legal professionals in your area. Because state law is relevant, your attorney should be licensed in the state of the rental property. Your search results will also show important details about prospective attorneys, like ratings, areas of practice, and whether they offer free consultations.