Landlords and tenants often disagree about the handling of the security deposit when the tenant leaves a rental unit. The tenant may feel that all or most of the deposit should be returned to them, while the landlord may argue that it needs to be withheld to cover fees related to unpaid rent or damage to the property. However, landlords in most states must return a deposit promptly when required or face penalties that may amount to double or triple the amount of the deposit. In most states, this must happen within 14 to 30 days of when you leave, regardless of whether you moved voluntarily or were evicted. They also must provide an itemized statement that reflects any deductions from the deposit.
Tenants often have a right to receive notice in advance of the deductions that the landlord plans to make from the deposit. This usually happens during the pre-move-out inspection, which gives the tenant a chance to avoid deductions by fixing the problems with the unit. Deductions still may occur during the post-move-out inspection if the issues remained after the pre-move-out inspection or were not visible at the time. In some states, tenants have an opportunity to respond to proposed deductions before they are made.
Deductions for Unpaid Rent
A landlord can deduct from your security deposit to cover unpaid rent, as well as unpaid utility charges and other financial obligations. This issue does not often arise when it comes to month-to-month tenancies, unless the tenant leaves later than planned without paying for extra time, the tenant fails to provide proper notice despite leaving as planned, or the tenant leaves on time but has unpaid rent from previous months.
If you leave later than planned, the landlord can prorate the monthly rent to determine the amount that you owe for the extra days and deduct that amount. If you failed to provide adequate notice before leaving, the landlord can deduct the rent for the remainder of the notice period unless they rent the property to someone else before it ends. If you have been delinquent on your rent for a long time, the landlord can deduct it from your security deposit even before you leave.
When it comes to fixed-term leases, the landlord can deduct the rest of the rent for the lease period from the security deposit, unless they are able to find a new tenant for the property. If a unit stays vacant for more than 30 days, a court may question whether a landlord made a good-faith effort to rent it again rather than just collecting rent from the tenant.
If you are evicted, you still owe rent to the landlord until you move out. This amount can be deducted from the security deposit if you fail to pay it. Outside the eviction context, a tenant sometimes will prefer not to pay rent for their last month and simply let the landlord deduct it from the deposit. You should get the landlord’s consent before taking this approach.
Deductions for Damage and Cleaning
A landlord can make deductions for repairs or cleaning costs that are needed to restore the property to its condition when the tenant arrived. However, these deductions must be limited to necessary repairs and cannot cover ordinary wear and tear. You should not be charged for the replacement of an item when repairing it would be adequate, and you should not be charged for cleaning if you paid a non-refundable cleaning fee. The amount that your landlord deducts for replacements or repairs should reflect their fair market value. Disputes often arise regarding repainting the walls or replacing rugs and carpets, since the line separating damage from wear and tear is blurry in these areas.
Before you leave, you should document the condition of the unit with photos and possibly videos. This will help defeat groundless claims of damage by a landlord and possibly get your deposit (or part of it) returned. You should also ask the landlord to conduct a final inspection of the unit in your presence so that you can address any alleged damage.
Cotenants and Security Deposits
If you move out before the rest of your cotenants, you may want to have your share of the security deposit returned to you at that point. This is an issue that technically involves only the cotenants rather than the landlord, and it may be solved if the new tenant pays their share of the deposit to the departing tenant. Alternatively, the other cotenants may combine to pay back the departing cotenant’s share of the deposit. Sometimes the landlord will agree to pay back the departing cotenant’s share of the deposit if they appear to have caused no damage.
Disputes Over Deposits
If your landlord appears to be reluctant to return the deposit or the amount of it that you believe is due, you should call the landlord and make a note of any conversation. You can then send a demand letter to the landlord, which in some states may be required before you can bring a claim in small claims court. Your letter should outline exactly what you want and why you think that you are entitled to it. If your state allows punitive damages for intentionally withholding the deposit, you can mention this fact.
If the landlord continues to hold out, you may want to consider pursuing a compromise or using mediation before going to small claims court. You can sue for up to $5,000 or $10,000 (depending on the state) in small claims court. It is important to be clear about the scope of the damages that you are seeking, which may include interest and punitive damages. The court likely will hear your case within 30 to 60 days, and the decision will be issued soon thereafter. You should make sure that you understand the law in your state and gather all of the evidence relevant to your position so that you can present it in court.
In some cases, a tenant’s security deposit may not cover the full extent of unpaid rent or damage. This allows the landlord to sue the tenant for the remainder in small claims court. Even if you know that you are in the wrong and know that you cannot pay, you should still go to court to avoid having a default judgment entered against you. A default judgment can undermine your credit rating and result in collection from your wages and bank accounts. If you go to court, moreover, you may be able to convince the judge to allow you to pay a lesser amount or pay in installments.