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LEGAL DICTIONARY

Security Deposit

What Is a Security Deposit?

A security deposit is an amount of money that a new tenant pays to the landlord of their residence before moving in and paying rent. The money is intended as a form of financial security for the owner in the event the tenant damages the property, owes back rent, or otherwise violates the terms of the lease agreement.

How Much Is a Security Deposit?

The cost of monthly rent typically determines the amount of a security deposit. Most security deposits are the same as one month's rent. However, other factors can influence the amount of a security deposit. Those factors include:

  • State law: Some states place a limit on the amount a landlord can charge as a security deposit. As a tenant, be sure to learn and understand your security deposit laws by state.
  • Property amenities: Some landlords charge more for their security deposits because the rental home offers various amenities. Amenities that might lead to a higher security deposit include private parking, in-unit laundry, concierge services, and new construction or new renovations to the property.
  • Local market: Many landlords will align what they charge with what other landlords in the neighborhood charge. Unfortunately, that means that if your new home is in a high-demand market, you may have to pay a higher security deposit.

How Does a Security Deposit Work?

When you sign the rental agreement, a landlord will ask for a security deposit. Some states may even require landlords to keep the money in a separate account where they cannot spend it.

After you move out, the landlord will return the security deposit once an inspection of the home reveals that you have abided by your lease agreement.

However, if you have violated the terms of the lease agreement, the landlord can use the security deposit as back rent or make repairs. Typically, the security deposit money is used to repair walls, counters, or floors; replace lost keys, or pay cleaning fees.

A landlord also may deduct part of your security deposit to pay for repairs and return the rest to you. This step is called a security deposit deduction.

Landlords cannot use the security deposit money to pay for everyday wear and tear to a dwelling. The following conditions typically are considered to be normal wear and tear:

  • Faded window coverings
  • Faded paint or wallpaper
  • Replacement smoke detector batteries
  • Typical small holes from nails
  • Furniture marks on the floor or carpet
  • Warped doors due to temperature fluctuations
  • Broken appliances (not caused by misuse)
  • Partially clogged drains and sinks

How Is a Security Deposit Returned?

The timeline for when you get your security deposit back can vary according to your state's regulations. If you are entitled to a full refund, you can expect a return of the security deposit from two weeks to two months after moving out.

You can take action if you feel you are entitled to a security deposit refund and do not receive it. Your first step would be to write a letter to the landlord requesting that the security deposit be returned.

This letter should include details of your time at the rental property and why you deserve to get the money back. If you and your landlord have a security deposit dispute, you may need to file a suit in small claims court. However, keep in mind that, in some cases, court costs may exceed the security deposit amount.

Helpful Resources:

California Courts - Security Deposits

Investopedia - Security Deposit Definition

The Balance - What Is a Security Deposit?

Security Deposit Basics - FindLaw

The Street - What Is a Security Deposit and How Does It Work?

What Is a Security Deposit?

A security deposit is an amount of money that a new tenant pays to the landlord of their residence before moving in and paying rent. The money is intended as a form of financial security for the owner in the event the tenant damages the property, owes back rent, or otherwise violates the terms of the lease agreement.

How Much Is a Security Deposit?

The cost of monthly rent typically determines the amount of a security deposit. Most security deposits are the same as one month's rent. However, other factors can influence the amount of a security deposit. Those factors include:

  • State law: Some states place a limit on the amount a landlord can charge as a security deposit. As a tenant, be sure to learn and understand your security deposit laws by state.
  • Property amenities: Some landlords charge more for their security deposits because the rental home offers various amenities. Amenities that might lead to a higher security deposit include private parking, in-unit laundry, concierge services, and new construction or new renovations to the property.
  • Local market: Many landlords will align what they charge with what other landlords in the neighborhood charge. Unfortunately, that means that if your new home is in a high-demand market, you may have to pay a higher security deposit.

How Does a Security Deposit Work?

When you sign the rental agreement, a landlord will ask for a security deposit. Some states may even require landlords to keep the money in a separate account where they cannot spend it.

After you move out, the landlord will return the security deposit once an inspection of the home reveals that you have abided by your lease agreement.

However, if you have violated the terms of the lease agreement, the landlord can use the security deposit as back rent or make repairs. Typically, the security deposit money is used to repair walls, counters, or floors; replace lost keys, or pay cleaning fees.

A landlord also may deduct part of your security deposit to pay for repairs and return the rest to you. This step is called a security deposit deduction.

Landlords cannot use the security deposit money to pay for everyday wear and tear to a dwelling. The following conditions typically are considered to be normal wear and tear:

  • Faded window coverings
  • Faded paint or wallpaper
  • Replacement smoke detector batteries
  • Typical small holes from nails
  • Furniture marks on the floor or carpet
  • Warped doors due to temperature fluctuations
  • Broken appliances (not caused by misuse)
  • Partially clogged drains and sinks

How Is a Security Deposit Returned?

The timeline for when you get your security deposit back can vary according to your state's regulations. If you are entitled to a full refund, you can expect a return of the security deposit from two weeks to two months after moving out.

You can take action if you feel you are entitled to a security deposit refund and do not receive it. Your first step would be to write a letter to the landlord requesting that the security deposit be returned.

This letter should include details of your time at the rental property and why you deserve to get the money back. If you and your landlord have a security deposit dispute, you may need to file a suit in small claims court. However, keep in mind that, in some cases, court costs may exceed the security deposit amount.

Helpful Resources:

California Courts - Security Deposits

Investopedia - Security Deposit Definition

The Balance - What Is a Security Deposit?

Security Deposit Basics - FindLaw

The Street - What Is a Security Deposit and How Does It Work?