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What Is a Security Deposit Used For?

What Is a Security Deposit Used For?

What is a security deposit used for? That’s a great question! It can be stressful or confusing when your landlord collects an extra sum of money (called a security deposit) at the beginning of your rental’s move in period – in addition to rent and other fees. You may feel relieved when you hear you can get the security deposit back when you move out… until you learn that your landlord can use some of it in certain situations. What can your security deposit be used for?

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What’s a security deposit?

A security deposit is an amount of money that the tenant agrees to pay the landlord one time at the beginning of their rent agreement. You aren’t charged monthly for a security deposit. The amount you must pay for the security deposit varies depending upon state laws and your landlord’s decision. Usually, your security deposit will be equal to 1 – 3 months of rent. You can click on this link for an article that has a specific section about how security deposits work in different states.

Why do landlords collect security deposits?

The landlord collects a security deposit so that they can use it to pay for breaks in your agreement or any unusual damage to the rental. This includes significant property damage, cleaning fees, unpaid rent, and broken leases. You should receive your full security deposit back if the landlord does not have to pay to fix or clean anything when you leave the rental unit.

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When can my landlord use my security deposit?

A landlord is legally allowed to use money from your security deposit if:

  • there is unpaid rent and/or utilities
  • the lease or rental agreement has been broken without mutual agreement from you and your landlord
  • the unit needs to be cleaned when you move out
  • the unit needs to be repaired beyond normal wear and tear

If your rental unit must be cleaned more by the landlord when you move out, your landlord can only use the amount of money necessary to make the unit as clean as it was when you moved in.

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What is a security deposit used for? A beautiful apartment with lots of plants may not have visible damage, but you'll want to make sure there are no problems with the rental. Otherwise, you could lose your security deposit to your landlord.
By Unsplash user Patrick Perkins

What’s the difference between damage and normal wear and tear?

You and your landlord may disagree over the definitions of damage and normal wear and tear. The following list usually counts as damage, which means that the landlord can legally take money from the security deposit for:

  • Damage caused by pets
  • Stained carpet
  • Flooring with burns, tears, or holes
  • Damaged walls
  • Broken fixtures
  • Damaged or missing window screens
  • Misused appliances
  • Broken doors or locks
  • Damaged or missing window blinds
  • Misused drains

The list below usually counts as normal wear and tear and should not be a reason to use money from your security deposit:

  • Loose rails or banisters
  • Damaged pipes (unless you damaged them)
  • Hole in a wall from a missing door stop
  • Light amounts of dust
  • Scuff marks
  • Worn hinges
  • Faded or worn carpet
  • Carpet with furniture marks on it
  • Chipped or faded paint
  • Faded curtains
  • Burnt out refrigerator bulb

What can be done if my landlord wrongfully tries to use my security deposit?

If your landlord is illegally using your security deposit, gather evidence that proves they are wrong to keep it. Proof can include pictures of damages present when you moved in, receipts of your paid rent and utility bills, or a written agreement between you and your landlord to end your lease early. Most landlords are required to send you an itemized list that shows you the costs and the reasons why they are using money from your deposit. Specifics depend on your state’s laws. Check your landlord’s math with the itemized list as well.

Once you have your evidence and have checked the math on the itemized list, contact your landlord in writing and try to negotiate with them. If you can work it out, make sure your new agreement is in writing and is signed by your landlord.

How do I sue my landlord for my security deposit in small claims court?

Please keep in mind that we are not lawyers and that laws and procedures may vary depending on your state.

If you cannot come to an agreement, send your landlord a demand letter before suing them in court. This will act as proof to the judge that you tried to negotiate. Many states require this proof via demand letter before you can sue in small claims court. A demand letter will also prove to your landlord that you know your rights and will not back down from reclaiming your money. Check your state’s laws to see what is required to go to court and what is considered a valid demand letter.

A demand letter usually should:

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  • Review the history of your agreement with the landlord
  • Discuss the reasons your landlord owes you money
  • Provide proof of relevant communications and agreements (such as your move out notice)
  • Be specific in asking for what you want (such as the full amount of your deposit within 15 days)
  • Cite state laws that apply to your demands
  • Say that you will sue in small claims court if necessary

If your landlord does not respond by your deadline or they give an unsatisfying response, you can file a lawsuit in small claims court. You will want to sue for the amount of your security deposit your landlord owes you. You can include interest on your security deposit in your lawsuit as well if it is required by your state or city. If the landlord was knowingly withholding your security deposit (acting in bad faith), you may also be able to sue punitive damages, depending on your state’s laws. In most states, the small claims limit is $5,000 – $10,000 dollars.

You should not need to hire a lawyer for small claims court. Disputes typically go before a judge within 1 – 2 months. To prepare for court, you will need to gather all necessary evidence. Examples include notice of intent to move out, photos of the unit when you moved in and moved out, and your demand letter. Clicking the following link to read our article on how to win a lawsuit against a landlord may help you.

Talk to a Lawyer!

Got specific questions about your situation? Low Income Relief is a team of researchers and can’t give legal advice… but our friends at JustAnswer may be able to help! Click on over to chat with a lawyer now.

How long does my landlord have to return my deposit?

Most states will require that your landlord return your deposit within 14 – 30 days of you moving out, but the exact timeframe will vary depending on your state’s laws. If your landlord has used money from your deposit, it will usually come with an itemized list.

How can I make sure my landlord gives my security deposit back without any issues?

When moving in:

Taking time to read your new lease or rental agreement in depth can help you know exactly what your landlord expects when it’s time to move out. While all landlords will expect a clean rental unit when you move out, some may say in the agreement that they expect walls to be repainted to their original color or nail holes to be filled.

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When you first move in, your landlord may send you a checklist or form asking about damages you may have noticed. Be sure to fill this out and report anything you notice. Before settling into your new rental, walk through the entire unit and take photos or video of any previously existing damages. This will be proof that you did not cause these damages when you move out. Send this evidence to your landlord at the beginning of your lease or rental agreement so that they are aware of these previously existing damages and cannot blame you for them.

When moving out:

Be sure to have an agreement in writing with your landlord about when you are moving out. If you have a month-to-month rental agreement, most states require you give your landlord a 30 day notice of when you will end your rental agreement and move out. If you do not notify your landlord in time, they may be able to charge you for another month of rent and use your security deposit to pay for it.

If you are leaving the rental before your lease ends, be sure that you have a mutual agreement with your landlord in writing. Find another tenant to rent the unit to so your landlord doesn’t charge you rent until your lease ends or another tenant moves in. They could take this rent out of your security deposit.

Contact your landlord before moving out to discuss cleaning expectations. Be sure to fully clean the unit and fix any damage that does not count as normal wear and tear. Once you have done this, take pictures and video to prove that you have left the rental in a good state. Ask your landlord if you can attend the final property inspection so you can do any last minute repairs or cleaning they think is necessary.

Keep receipts for paid rent and utilities in case your landlord accuses you of not paying. Request your security deposit from your landlord in writing once you have moved out. Give your landlord your forwarding address so that they can send your security deposit to you. In some states, landlords can keep their former tenants’ security deposits if they are unable to find their new address.

What else can Low Income Relief do for me?

Glad you asked! This article about whether a landlord can charge you more than the security deposit may help you. You could also check out this article answering the question of how security deposits work. If you’re curious about what a security deposit is used for, this article may help you.

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As a third-year English major with years of researching and writing experience, Chloe uses her experience and her passion for helping others to help you get the financial aid you deserve.