security deposit

There seem to be a lot of misconceptions about what a security deposit is and what it is not. While it’s understandable to be a little unsure on the topic of normal wear and tear: the security deposit is something that is in fact, defined by law. Though the laws vary from state to state, there are a few things that are pretty much universal.

Security deposits should always be kept in an interest bearing bank account separate the rest of your finances and returned to the tenant when they leave, at the end of their lease term. When a tenant does leave, then if there is damage, property managers and landlords do have the right to deduct money from that in the amount of the damages caused. Only in some states are they allowed to deduct unpaid rent from it. That is something you will definitely want to check the above link on, because if your state isn’t one of them: you could end up paying double damages if that tenant takes you to court.

 

Additionally, if you don’t have a detailed list of damages and costs to go along with the deductions delivered within the appropriate time frame deemed by your state: you can also lose the right to deduct anything at all. It would not matter if the tenant had completely wrecked your rental, if you don’t abide by the law, you lose the right to with-hold any of that security deposit.

 

This is why it is vital that you do a final walk through, after the tenant has moved all of their things out. At this point, it’s a good idea to go ahead and bring the deposit in full, with you. That way, if the rental is in acceptable condition, you can return it immediately. If not, then waiting until you do have the appropriate amount for the deductions is acceptable, as long as you do so in a timely fashion. It’s also always a good idea to take photos as you do this walk through so that you have documentation in the event of a dispute. Remember, as you do this walk through- normal wear and tear is not an offense for which you can keep part of a security deposit.

 

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Kurt Kroeck has written articles in real estate, law, and art related niches for a number of high profile publications. He is an avid WW2 re-enactor, artist in graphite, charcoal, and digital media. He volunteers in animal rescue and enjoys spending time with his children.

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