Navigating Security Deposit Refunds: What You Need to Know

For every tenant, not getting their security deposit back is something that they dread. After all, the deposit often represents a significant sum, ranging from a few hundred to a few thousand dollars; often the equivalent of one or two months’ rent.

Fortunately, there are laws that protect both tenants and landlords regarding security deposits. Knowledge is power, so it’s best to familiarize yourself with these matters early to prevent disputes and deductions. 

In this article, we’ll talk about your rights as a tenant, cases when a landlord is eligible to keep the deposit, and best practices to help you keep your security deposit intact.

Why Do Landlords Ask for a Security Deposit?

At its core, a security deposit is a safeguard, a monetary assurance that tenants will take good care of the property they’re renting. It’s usually paid upfront upon signing of the lease agreement.

Besides potential damages to the property, there are other risks that landlords face, such as unpaid rent or breaking the lease. The deposit acts as a buffer against these risks. However, it’s essential to remember that this deposit is not an extra fee or rent. It’s your money that’s held in trust, and if you followed the lease rules and left the property in good condition, you should get your deposit back.

Tenants’ Legal Rights

Tenants must be aware of their legal rights regarding security deposits. While laws vary based on your location, there are general principles that apply in most places:

• Security Deposit Amount: Typically, landlords will request one to two months’ rent for the security deposit, but this can vary greatly. More than half the states limit how much landlords can charge for a security deposit. Some states, such as Florida, Indiana, Ohio, South Carolina, and Utah have no limits, but cities and counties in these areas may set their own limitations on how much can be charged.

• Timeline for Return: Most jurisdictions have a stipulated time frame by which landlords must return the security deposit. This is typically between 14 to 60 days after the end of the lease. If a deposit was wrongfully withheld or returned outside the timeframe, the landlord could face financial penalties. If this happens, some states require landlords to pay tenants double or even triple the amount of the security deposit.

• Withholding the Deposit: Landlords can’t arbitrarily decide to keep your deposit. They must have a valid reason. This includes unpaid rent, damages to the property beyond normal wear and tear, terminating the lease early, and unpaid utilities.

• Itemized List of Deductions: If a landlord decides to withhold part or all of your deposit, they will generally need to provide an itemized list of the deductions and give it to you within 30 days of moving out. This list should detail the reasons for each deduction, such as cleaning, repairs, and back rent. In many cases, they should also provide receipts for any repairs or cleaning services. Without an itemized list, the landlord gives up the right to keep the deposit.

• Interest on Deposits: Some regions require landlords to pay interest on the held security deposit, especially for long-term leases. For example, in Connecticut, the security deposit must be placed in an escrow account of a local financial institution. The landlord must pay accumulated interest to the tenant upon the first anniversary of the tenancy as long as the tenant regularly pays rent. Florida, Massachusetts, and New Jersey are other areas that require interest payouts to tenants. If your deposit wasn’t kept in the appropriate account required by law, this could also lead to penalties.

Again, laws and regulations can vary significantly between states and cities, so always be sure to check for your local area if you are unsure. 

A great relationship with your landlord can prevent nasty disputes in the future. Read more about How to Be a Great Resident.

Cases When Landlord Can Use the Security Deposit

There are specific circumstances wherein landlords might withhold part or all of a tenant’s deposit. 

Here are some of the most common reasons why a landlord might keep the security deposit:

• Unpaid Rent and Utilities

If a tenant has unpaid rent or outstanding bills upon vacating the property, most states allow the landlord to use the security deposit to cover these costs. 

• Damage to Property

Any damage beyond normal wear and tear can be a reason to keep the deposit. Landlords and tenants may disagree over what’s considered normal wear and tear versus tenant damage. When in doubt, refer to the U.S. Department of Housing and Urban Development (HUD) guidelines that differentiate normal wear and tear and damage.

Normal wear and tear may  include the following:

• Fading, peeling, or cracked paint

• Faded or slightly torn wallpaper

• Small chips in plaster

• Cracks, nail holes, or pinholes in the wall

• Door sticking from humidity

• Cracked window pane from a faulty foundation

• Floors needing a coat of varnish

• Carpet faded or worn thin from walking

• Loose grouting and bathroom tiles

• Worn or scratched enamel in old bathtubs, sinks, or toilets

• Rusty shower rod

• Dirty or faded window shades 

Tenant damage may include:

• Sizable holes in walls or plaster

• Drawings or markings on the wall

• Damaged wallpaper

• Gouged or chipped flooring

• Doors ripped off hinges

• Holes in the ceiling from removed fixtures

• Broken windows and missing fixtures

• Carpet holes, stains, or burns

• Cracked or missing bathroom tiles

• Damaged or clogged toilet from misuse

• Missing or bent shower rods

• Missing, torn, or stained lamp and window shades

In many cases, a landlord will have these things outlined in your lease agreement.

• Cleaning Fees

If a tenant leaves the property in a state that requires excessive cleaning, the landlord can deduct the cleaning costs from the deposit. In many states, such as New York, the rental unit must be returned in the same clean condition it was received, minus normal wear and tear.

• Alterations Without Consent

Making significant alterations to the property without the landlord’s permission can lead to deductions. This includes painting walls or installing permanent fixtures without obtaining the landlord’s consent.

• Early Lease Termination

If a tenant breaks the lease agreement by moving out before the agreed-upon date, landlords might withhold the deposit to cover the lost rental income. This will depend on your lease and the landlord-tenant laws in your state.

• Missing or Broken Items

If items the landlord provides (such as furniture or appliances) are missing or broken, replacement or repair costs may be deducted from the security deposit as well.

13 Tips on Getting Your Security Deposit Back

Nobody wants to lose all or part of their deposit. Fortunately, losing your security deposit can generally be avoided. Here are some tips that can help you to get your deposit returned to you:

1. Understand Your Lease Agreement

Before signing anything, read your lease agreement thoroughly. This document will outline your responsibilities regarding property maintenance, damages, and wear and tear. Don’t hesitate to ask any questions that you have concerning the security deposit.

2. Conduct a Thorough Move-In Inspection

Before you settle into your new home, conduct a detailed walk-through with your landlord. Make a checklist and document every pre-existing condition. Take photographs or videos of any damages, no matter how minor they seem. This visual evidence could be invaluable when you move out.

3.  Keep the Property Clean

Something as simple as regular cleaning can prevent issues that arise from long-term neglect, like mold or staining. Schedule periodic deep cleans, especially for areas that can accumulate grime over time, like bathrooms and kitchens.

4. Pay Your Rent and Utilities Regularly

Staying up to date with your rent payments helps to ensure that you won’t owe your landlord anything at the end of your lease. Don’t forget to keep proof of all your payments as well. Paying on time also shows that you’re a responsible tenant, and if you need a positive tenant reference from your landlord, they’ll most likely be happy to provide one.

5. Address Damages Immediately

If something breaks or gets damaged, notify your landlord promptly. They might prefer to address the issue themselves or advise you on handling it. Immediate communication can prevent minor problems from turning into significant deductions.

6. Make Only Approved Alterations

We want to make our rental feel as homey as possible. However, your lease agreement could prevent you from taking on home improvement projects like painting a room or hanging shelves on the wall. If you have any alterations you want to make, it is always get your landlord’s written permission first before starting any work.

Itching to do a home makeover? Here are some easy, practical tips: How to Give Your Rental a Makeover - Within Your Rental Agreement.

7.  Keep a Maintenance Log

Keep a record of any repairs, cleaning, or maintenance you’ve done. This can include professional carpet cleanings, fixing leaky faucets, or patching up minor wall damages. Documentation serves as proof that you did your part in taking good care of the unit. 

8. Avoid Smoking Indoors

Smoke can discolor walls and leave a lingering smell that can be expensive to remove. Typically, lease agreements will also state that smoking indoors isn’t allowed.

9. Mind Your Pets

If your lease allows pets, ensure they’re well-trained to prevent property damage. Aside from possible damage to furniture, pets can also leave strong odors, stains, or fur within the unit. Regular grooming can reduce excessive shedding, and frequent bathroom breaks helps to prevent accidents.

10.  Consider Renters Insurance

Renters insurance can cover damages that might otherwise come out of your security deposit. It’s an added layer of protection that can benefit both you and your landlord.

Learn more about The Benefits of Renter’s Insurance: Protecting Your Belongings and Liability

11. Give Your Landlord Enough Notice

If you plan to end your tenancy, give your landlord the required notice that’s outlined in your lease. Without proper notice, your landlord could still charge you for the remainder of the lease term and take it out of your security deposit. 

12. Do a Pre-Move-Out Inspection

A few weeks before your lease ends, ask your landlord to do a walk-through inspection of the property with you. Zachary Schorr, a Los Angeles-based real estate attorney, tells U.S. News, “This provides the tenant the opportunity to speak with the landlord and compare the photos to any damage the landlord claims. The tenant can then also fix items needing repair before moving out.”

13. Leave the Property in Move-in Condition

When it’s time to move out, leave the property as close to the move-in condition as possible. This might mean hiring professional cleaners, patching up small holes, or repainting walls in their original color. Talk to your landlord about his expectations for the home’s cleanliness so that you’re on the same page.

Getting your security deposit back in full is more than just a financial win. It’s also a sign that you’re a responsible renter and proof of a good landlord-tenant relationship. By knowing your rights, building a positive relationship with your landlord, and treating the property with respect and care, you can raise your chances of getting your security deposit returned to you.

Navigate your tenancy like our pro, even if it’s your first time. Read our Tips for First-Time Renters - 5 Things New Renters Should Know. If you’re looking to rent, check out the list of available rental homes in your area. If you see something that you like, you can submit your lease application today.