FAQ

Security Deposits

If you rent an apartment or a house, it is likely you will be asked to provide a security deposit, the last month's rent, or both. The laws surrounding these deposits vary from state to state; this is a general overview.

A security deposit and the last month's rent are not the same thing. Last month's rent is the pre-payment to the landlord for the last month of tenancy. A security deposit is a deposit of money to the landlord to ensure that rent will be paid and other responsibilities of the lease performed (e.g., paying for damage caused by the tenant).

The amount of the last month's rent and of the security deposit each are usually one month's rent, and in some states they cannot be greater than one month's rent. If the landlord later raises the rent, he or she can require you to increase both the amount of the last month's rent and the amount of the security deposit to equal the new rent. A landlord typically cannot transfer one for the use of the other without the tenant's consent. Likewise, the tenant may not use the security deposit as the last month's rent.

Upon receiving a last month's rent and/or a security deposit, the landlord should give you a receipt for each prepayment. If he or she does not, it is appropriate to ask for one; the landlord is required to give you a receipt in many states. The following information should be included in the receipt:

  • the amount paid,
  • the date on which it was received,
  • its intended use,
  • the name of the person receiving it,
  • if an agent is involved, the name of the landlord for whom the rent is collected, and
  • the signature of the landlord or agent.

If the last month's rent is collected, the landlord should also give you a statement indicating whether you are entitled to interest. You should provide the landlord at the termination of tenancy with a forwarding address where the deposit and interest is to be sent.

THE LANDLORD MAY BE REQUIRED BY YOUR STATE'S LAW TO PAY INTEREST ON BOTH LAST MONTH'S RENT AND SECURITY DEPOSIT.

If a landlord or agent takes a security deposit, it is in your interest to agree with the landlord on the present condition of the premises. In some states, a signed statement of condition is required. The statement should contain a comprehensive list of existing damages. It may also be wise to take notes and to photograph existing damage and the general condition of the apartment.

The landlord must return the security deposit within a fixed time (typically thirty days) after the termination of tenancy. However, the landlord can usually deduct for the following:

  • any unpaid rent which has not been withheld validly or deducted under the law; and
  • a reasonable amount necessary to repair any damage caused by the tenant, any person under his/her control, or any person on the premises with his/her consent.

Pet damage can also be deducted. The tenant does not have to pay for reasonable wear and tear associated with normal use. However, the tenant is responsible for maintaining the apartment in a clean and sanitary condition, free of garbage and rubbish.

If the premises are damaged, the landlord must typically provide the following within thirty days after the tenancy ends:

  • a detailed list of damages listing their nature and extent and the repairs required to remedy them; and
  • written evidence such as estimates, bills, invoices, or receipts, indicating the actual or estimated cost of these repairs.

The landlord must return the balance of the security deposit (if any) after all proper deductions have been made. If the landlord fails to return the security deposit (or balance after lawful deductions) with accrued interest within the prescribed time after termination of the tenancy, or fails to furnish you with an itemized list of damages within that time if deductions are made for damages, you can sue him or her. Many states' statutes provide for damages in triple the amount of the security deposit withheld.

Typically, state courts make some provision for easy resolution of security deposit disputes, such as in small claims, conciliation, or landlord/tenant court. Call your local court to discover your options.

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