Security Deposits & The Legal Interests of Landlords & Tenants
A security deposit is a sum of money paid by a tenant to a landlord before the tenant moves into a rental property. The security deposit, also known as a cleaning or pet deposit, is held by the landlord during the period of tenancy. If the tenant fails to pay rent or causes unreasonable damage to the property, the landlord may use the security deposit to cover the unpaid rent or pay for repairs. If the tenant pays all rents and leaves the property in good condition, the security deposit must be returned to the tenant within 14 to 30 days.
Documenting Existing Damages
Some states require both the landlord and the tenant to sign a Statement of Condition before a landlord may accept a security deposit. A Statement of Condition documents the condition of the property on the tenant's move-in date, including all existing damage and needed repairs. When a Statement of Condition is not required by state law, tenants are encouraged to protect their security deposits by drafting a detailed description of the property before they move in.
Amount of the Deposit
Typically, a landlord asks for a security deposit in the amount of one month's rent. While a security deposit may be less than one month's rent, many states prohibit a landlord from demanding more than this amount. A majority of states also require that the landlord pay the tenant any interest accrued on the security deposit.
Distinguishing Actual Damage from Ordinary Wear and Tear
A landlord may only charge the tenant for property damage that goes beyond "ordinary wear and tear." Because the distinction between actual damage and ordinary wear and tear is often tenuous, many disputes arise over how a landlord has interpreted a particular condition. Generally, actual damage is caused by careless or intentional behavior, while ordinary wear and tear occurs even when a tenant acts prudently. Examples of ordinary wear and tear include water stains in the shower, faded paint caused by sun exposure, and a hall rug worn-out by normal use. Examples of deductible damages include carpet stains caused by pets or other spills, broken light fixtures, and excessive grime and filth.
Withholding the Deposit
If a landlord withholds all or a portion of a security deposit, the landlord is required provide the tenant with a statement explaining why the deposit is not returned in full. If a deposit is withheld because of damage caused by the tenant, the statement must provide a detailed description of the damage and the landlord must attach documentation evidencing the actual or estimated costs of repair.
Returning the Deposit
A landlord is required to return any remaining security deposit, as well as any interest accrued on the deposit, within 14 to 30 days after the tenant has vacated the premises. If a landlord fails to return the security deposit within the specified time, or if the tenant disagrees with the amount returned, the tenant may sue the landlord pursuant to state law. Typically, landlord - tenant disputes are heard in the state's small-claims court. Tenants are encouraged to attempt negotiations with the landlord before resorting to legal action.