A security deposit is important for the protection of a landlord. Even tenants with excellent rental histories and good credit might fail to pay their rent in full and on time. They could also theoretically cause significant damage to the property during their tenancy.
A security deposit helps protect a landlord by giving them access to liquid capital that can pay for repairs or replace the rent that they did not receive from their tenants. Security deposits are often a source of tenant-landlord conflict at the end of a lease. Tenants may expect their security deposit back, while a landlord may want to keep it.
When is a tenant’s security deposit at risk?
The law limits security deposit retention
Tenants have relatively robust legal protections under state statutes. The law limits when landlords can keep a security deposit. State regulations also require that landlords provide an itemized list of the deductions they intend to make and return the remainder of the security deposit promptly after the end of a lease. A landlord can retain security deposit funds to pay for repairs to the property.
General wear and tear or cleaning between tenants is not adequate reason to retain a security deposit. Tenants need to have caused significant damage to justify the retention of security deposit funds. Landlords can also keep some or all of the security deposit to replace unpaid rent for fees owed by the tenant. To retain those funds, they must provide notice to the tenant and allow them an opportunity to respond.
Disputes about security deposits sometimes require legal assistance. Both landlords and tenants may need help navigating a security deposit issue through negotiations or possibly litigation, and that’s okay.