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Security Deposits

Security deposit law applies to both landlords and tenants in order to protect the rights of both parties. It ensures that the tenant adheres to his or her responsibilities in regard to caring for the property during their tenure, and restricts the amount of deposit that a landlord can require.

Laws concerning security deposits vary from state to state. An apartment security deposit may differ from the deposit on a rental of a house, a condo or a commercial property, and there are sometimes some differences between short-term rentals and long-term leases. Whether you are a tenant concerned with a renter's right to return of a security deposit, or a landlord concerned with the condition of your property and the tenants' ability to pay for damages, it is best to consult with an lawyer who knows the security deposit law in your state before you contract for rentals or leases.

Limits on Security Deposits

In most states, there is a limit on the amount of money that a landlord can require as a deposit. For instance, in one state a landlord is allowed to require one-month's rent as the deposit on a rental agreement that is less than one year; but, there is no limit if the rental agreement is for more than one year. In another state, two months rent can be taken as deposit on an unfurnished residential property, and three months rent for a furnished property, while commercial properties in the state do not have any limits.

It sounds simple enough to understand; but, there are specific things in the law that can make applicability of laws confusing. Also, remember that the laws and exemptions vary from state to state. Before signing an agreement, it is best to make sure that the contract is in accordance with law of your state and provides you with the best protection available.

Security Deposit for Pets

In most instances and in most states, the landlord is permitted to collect a separate deposit, on top of the general deposit, if there are to be pets living on the premises. Pets often cause damages to the property, such as damage to the yard from digging, damage to wood from chewing, not to mention carpet damage due to urination. These things may seem "normal" to the pet owner, but property owners view them as added expenses. Because of the potential damage, the landlord may choose to have a "no pets" policy. In instances where the tenant has a physical or psychological disability that requires an assistive animal, the landlord's policy may be superseded by laws that permit the use of assistive animals in the household. This may or may not affect renter's security deposit.

Return of the Security Deposit

Security deposit law sets time limits for landlords to return the deposit to the tenant or to provide a statement of deductions from the deposit. There are a lot of differences from state to state in regard to the return of the deposit or explanation of deductions. Usually, the time for return of the security deposit is 14 to 60 days, depending on which state you live in. However, there are various exceptions, such as whether the tenant gave notice or abandoned the property, whether the landlord was provided a forwarding address, and so forth. In some states, if the landlord fails to meet the deadline, they cannot deduct anything from the deposit, and sometimes they have to return double the amount of the deposit if they fail to return the deposit in time. Sometimes the deposit can be applied to unpaid rent.

Damages versus Normal Wear and Tear

Damages to the property can definitely be deducted from the security deposit under security deposit law; however, usually normal wear and tear cannot. Occasionally, the tenant and the property owner have different views on what represents normal wear and tear and they end up in court.

Documentation and photos play a big part in determining the liability due to damages, and they can be beneficial in a court of law. Tenants should perform a walk-through and document any damages before they move in to prevent such preexisting damages from being deducted from their security deposit. A walk-through after moving out will provide a comparison of what the property looked like when the tenant moved in and what it looked like when they moved out. Such documentation can be beneficial to both the tenant and the landlord.

In cases where property is damaged beyond repair, it is common for the replacement cost to be prorated to reflect the useful life of the property. The renter's security deposit may be protected from having the full cost of replacement deducted.

It is normal wear and tear for carpet to fade, to have marks from furniture or to be worn; but, if the carpet is torn, burnt or stained, that constitutes damages. Water damage may be the responsibility of the landlord or the tenant. For instance, if the tenant caused the plumbing to back up due to improper disposal of items, the tenant may be held responsible. However, if there was a water leak and the landlord was informed and didn't fix it, the landlord may be responsible.

Security deposit law doesn't specifically define the differences between damages and normal wear and tear. Common sense plays a big part in relationships between tenant and landlord and often is used in court cases. Only an experienced landlord-tenant lawyer will be able to advise you.