What's the deal with security deposits when you rent?
Updated: Sep 9, 2019
Each time you move into a new place, you'll be expected to put up a security deposit. Most tenants say they don't like to have to save up to be able to move into a new place, but most property owners require a security deposit up front. Let's talk about what a security deposit is, when it needs to be paid, and how to go about making sure you get it back when you leave a property.
Basically, a security deposit is a deposit of money that either goes to the landlord or the property manager / realtor to make sure that when you move out, the place will be in the same condition as when you move in. Depending on the state you're renting in, most likely your security deposit will have to be held in an account - the landlord doesn't get to spend it. The amount of a security deposit can vary - some owners require a one month security deposit, some require a month and a half, and others require two months or more. It's important to find out how much the security deposit is before agreeing to rent a place. The maximum security deposit that can be collected varies by state - as an example, in Florida, there is no maximum, but in Hawaii, the security deposit is limited to one month's rent. Most owners max out their security deposit at two months because they realize that if the amount they require is too high, prospective tenants may be forced to look elsewhere.
When you sign a new lease, most owners will collect your security deposit. On rare occasions, some may allow you to pay your deposit prior to moving in. Rarely will an owner take the risk of permitting a tenant to move in without the full security deposit being paid. Think about it - if you come in and cause damage and you haven't paid your security deposit, it's going to be more difficult for the owner to correct the damages to get the place ready for someone else.
Now for the important part - how do you go about making sure that you'll receive your entire security deposit back at the end of your rental lease? In each state, this varies. Generally, if you have unpaid rent, the owner can withhold the amount of unpaid rent from your security deposit being returned. Let's say you've paid a $1500 security deposit up front and you're short of paying $500 this month - the owner can withhold this amount from your deposit and just return the difference of $1000 to you. If when you leave it is determined that you have caused damage to the rental (not just normal wear and tear but real damage like a broken door or carpet that has been soaked with pet urine), the owner will most likely make a claim against your security deposit to cover the damages. As you know, damaging property can be costly! A broken exterior door that needs to be replaced can be several hundred dollars. If urine has dried into the carpet, most likely the carpet and padding will need to be replaced if the pet accident was not quickly taken care of when it first occurred. Between unpaid rent and damage claims against your security deposit, you can find yourself moving out without getting any of your security deposit back.
So what can you do to make sure you'll get your full security deposit back? Begin by carefully reading the terms and conditions of your lease. Make sure you understand exactly what you'll need to do in order to receive your full deposit back. This may include having the property professionally cleaned, having carpets cleaned, making sure to take all of your belongings with you when you leave, etc. Prior to moving in, you and the owner or their designee will perform a walk through. During this, take careful notice of anything that may be damaged prior to you moving in. Be sure to document all damages carefully, both in writing and with pictures. Make sure that both you and the owner sign the document listing all known damages. Another walk through will take place when you are moving out. Both you and the owner should have a copy of what was discovered during the moving in walk-through. If anything has changed, the owner will make you aware of what they discover and will note it on the final document. The owner will then go back and figure out what amounts they intend on holding from your security deposit to cover the damages. Depending on the state, you may be able to dispute what was found. You know they say a picture is worth a thousand words? Now would be a good time to produce pictures showing the condition of the unit prior to your moving in along with a copy of the document signed by both you and the owner listing the actual condition the property was in prior to you taking residence!
Finally, here are a few pieces of advice for making sure you get your full security deposit back. Make sure you understand what is expected of you as the tenant - the best way to do that is to make sure you fully understand your lease. Be sure to take all of your belongings with you when you leave, and follow any directions you have been given for disposing of your belongings that you no longer want. Do a thorough cleaning of the place before you leave in advance of your final walk-through with the owner. If you know you've caused damage, be up front about it with the owner. He or she may permit you to do the work to correct the problem, but check with them first. By being a good tenant throughout your lease, you may find that an owner will work with you when it's time for you to leave.
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