Rent and Security Deposit Laws

A security deposit is a sum of money a tenant pays to their landlord to serve 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 agreement ends, the landlord must return this money to the tenant, less any itemized deductions. State laws dictate when the landlord must return the security deposit after the end of the lease.

This FindLaw article explores security deposit laws, how they impact renters, and how to protect your security deposit.

Landlords and 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. Other states limit the amount of the security deposit a landlord may request. 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 regulate security deposit limits. In some states, like Maryland, the landlord cannot ask for more than one month’s rent as a security deposit in most circumstances.

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

Higher Security Deposits

Through the screening process, 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

Part of the purpose of renting is income generation. The landlord sets an amount for rent, and the tenant pays this amount per the rental agreement. Nonpayment of rent can lead to eviction, which is time-consuming and often expensive. To avoid any confusion with paying rent, landlords and property management companies can take measures to ensure rent payments are timely and paid in full.

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 with any potential disputes.

Renters and Security Deposits

Most landlords require the payment of a deposit before the start of the lease period. Most states require the landlord to deposit this money in an interest-bearing bank account. The tenant gets any interest collected during the lease term.

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.

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 pictures or a video to back up the assessment. If you do not clean the apartment or if there is any property damage, the landlord may use the security deposit to cover the cost of repairs.

Security Deposit Deductions

If the landlord makes any deductions from the security deposit, they must give the tenant an itemized statement. This itemized list should include all the deductions needed in the rental unit.

The following is a list of possible deductions:

• Unpaid rent
• Unpaid utilities
• Property damage (beyond normal 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 Help

Landlord-tenant laws are complex. If your landlord won't return your security deposit, a qualified local landlord-tenant attorney can help.