Tenant Security Deposit Deductions
If you are leasing or letting your property for the first time, you should keep yourself informed of the many important terminologies of property rental. One of the most important terms that you will be using quite a lot of is “tenant security deposit.” Find out what it is and how it protects a landlord for damages and bills that are left by a previous tenant.
What is a tenant security deposit?
A tenant security deposit or simply security deposit is a refundable deposit that a tenant pays to the landlord before they occupy the property. Landlords are required by law to provide a contract of lease to a tenant and this contract contains all the necessary rules in renting the property. As long as the tenant follows the terms or rules that are contained in the contract, the deposit should be returned. However along with violation of any clauses of the contract, there are certain situations that will allow a landlord to keep a portion or the entire amount of the security deposit.
What charges may be deducted from this deposit?
- Rental payments – if the previous tenants were unable to pay rent or a portion of the rent was not paid then the amount should be deducted from the tenant rental deposit. Not all states in the US accept this and therefore you should consult your local rental property associations in the area.
- Damage to the property– any damage to the property which is not the result of normal wear and tear should be deducted. Damages usually include multiple holes in the walls, water damage on hardwood floors, missing outlet covers, smoke or carbon monoxide detectors, cracked kitchen or bathroom countertops, stains or holes in the carpeting, broken doors and windows and so many more.Damage to property may also be termed as major repairs. Major repairs need to be done extensively so that the place or property will be ready for the new occupants or for interested people to view.
- Nonpayment of utilities – when a tenant leaves the property with unpaid utilities (phone, cable, internet, etc.) the landlord may be able to use a portion or the entire amount of the entire property deposit to pay for these utilities. This may also depend on the contract of lease provided by the landlord.
- Cleaning bills – previous tenants could leave a mess as they move out of the property and of course the landlord has to make the place presentable for interested customers. Naturally the landlord needs to do some cleaning but if the place has been ruined due to the misuse of the tenant then this is the time the landlord could take a portion of the deposit amount to cover for cleaning expenses. An example is when a tenant has a pet dog that has soiled the carpeting or when a tenant has left trash all over an apartment then the cost of removing and cleaning the area has to be deducted from the deposit.
When should you return a tenant security deposit?
Different states have different rules regarding when to return a rental deposit. The most a landlord could keep a deposit is 30 days after the tenant has vacated the property. This gives the landlord, enough time to itemize a list of the deductions that you will apply on the deposit amount plus enough time to notify the tenant of these deductions. Landlords could return the tenant security deposit by check or in cash. Details of how a deposit amount is returned and the possible deductions that may be made should be clearly indicated in a rental contract.