When you rent a place, whether it’s a house or an apartment, you are required to pay a certain amount of money, which is referred to as the ‘security deposit.’
Almost every rental agreement includes a deposit that is refundable and is a one-time payment.
All landlords collect the security deposit from the tenants along with the first month’s rent and hold on to it till the time when their rental agreement comes to an end. The main purpose behind security deposits is to provide insurance to landlords in case a tenant causes serious damage to their property.
However, there’s more to it than just that. There are a few important details about security deposits that every renter should know well.
We’ve rounded up the main ins and outs of rental agreement security deposits that you ought to know about the next time you set out to find a nice place to rent for yourself.
What Does the Security Deposit Cover?
The security deposit covers a number of things during the entire period of a tenant’s stay at the rental property. These include:
- Property damage
This is one of the most common of all factors that landlords use the deposit for. However, for them to be able to use it, the damage caused by tenants must be beyond normal wear and tear, such as serious carpet burns or structural damages like holes in the walls.
- Missed rent payments
Often times, tenants fail to pay their rent on time and end up missing the payment deadline. If it happens very frequently, the landlord can use the security deposit to make up for the missed rent payment.
Furthermore, if you owe your landlord any amount of money at the time of vacating their property, they are likely to pull it from your security deposit.
- Loss of house keys
If a renter somehow misplaces or loses the key to the rental property, the landlord can deduct some money from their rental deposit to pay for key replacements.
- Cleanliness and hygiene
If you leave the apartment in a very dirty condition with uncleaned floors, stove, and refrigerator, you will face a deduction in your security deposit as your landlord will use that money to get professional cleaning services done in the rental space.
How Much Is the Security Deposit?
There’s no fixed or set rate for rental security deposits, however, some states and local laws to impose a restriction in terms of the amount that a landlord can charge from their tenants as a security deposit.
In most cases, the security deposit amount that landlords charge from the renter is somewhere between 1-3 months’ rent.
For instance, in California, the security deposit cannot be more than three months’ worth of rent for a fully furnished rental property, whereas in New York, it can only be up to one month’s rent, regardless of the circumstances.
Laws Pertaining to Security or Rental Deposits
Other than restrictions on the amount of the security deposit, there are a few other laws pertaining to it as well.
Refunding the Security Deposit
As mentioned above, the security deposit is a one-time, refundable amount that the landlord is supposed to return to the tenant when their rental agreement is about to end. It’s generally paid back to the renter once they vacate and move out of the property.
The landlord will first thoroughly inspect the rental space to look for any possible signs of damage or wear and tear. Once the inspection is complete from their end, the landlord should immediately return the money to the renter. There’s a specific time frame in which the refund needs to be made, which basically varies from one state to the other.
All renters should know that if your landlord fails to return you the money within the mentioned time duration, you can actually sue them or file a report to the local authorities.
Security Deposit Deductions
Most laws state that landlords can deduct money from the tenants’ security deposit if the latter breaks the lease in any way or owes the landlord unpaid rent from before.
This also applies to instances where the tenant is responsible for any kind of damage to the property, given that it is above and beyond the normal wear and tear.
However, the law also requires landlords to provide reasons to the tenants for any deductions made. In many states, they are also supposed to provide the tenant with a notice of deductions before they actually get to it.
Lastly, landlords should always return the remaining amount of money back to the tenant, given that the deductions don’t meet the total amount of the security deposit.
Frequently Asked Questions About Rental Security Deposits
When can I expect my security deposit back?
This mainly varies from state to state, so it depends where you live. However, as a general rule, landlords are required to return the security deposit back to the tenant within 60 days of them vacating the property. You can take legal action if your landlord doesn’t return within the time frame.
What happens to my security deposit once I pay it?
Once you pay the security back to your landlord, they usually keep it safe in a bank account so that it doesn’t get lost. It remains in the account unless the landlord has to make a deduction or the time comes for them to return it back to you.
Am I to pay the first month’s rent plus the security deposit at the same time?
Mostly yes, but it’s also up to your landlord. They are likely to ask you to pay both things at the same time because they need to ensure that you can pay rent every month and that you are locked in for the rental agreement.
If you happen to be renting a new place, it is ideal that you consider the above-mentioned information about rental security deposits. You should also make sure that your landlord is following all the rules and laws about the deposit according to what has been laid down by the state in which you live.
In case you haven’t been able to find a nice place according to your requirements, check what’s available at Dwellsy!
Check out these additional renter tips as well.