A security deposit is a given sum of money that your landlord expects you as a tenant to pay before moving into a rental unit. A security deposit is meant to serve as a safeguard for damages that may potentially be caused by the tenant in the apartment. Consequently, it encourages a tenant to be more careful with how they treat the property in order to retrieve the money paid as the security deposit.
How much security deposit can a landlord charge? The amount that a landlord may collect as a security deposit varies widely depending on a number of factors such as the state you live in, your credit score, and your landlord’s preference. When it comes to states, some have limits while others don’t. In most of them, the amount you will be required to pay falls somewhere within one to three months’ worth of monthly rent, but a landlord may also opt to charge you less.
Landlords use a variety of factors to determine the amount that they will charge as a security deposit.
Factors that may affect how much you pay
1. The state you live in
As previously mentioned, some states have a set limit for the amount to be paid as a security deposit, while others don’t have a required limit. For example, California state law limits the security deposit to two months’ rent for unfurnished apartments and three for a furnished one. Similarly, in Kansas, you are required to pay one month’s rent for an unfurnished apartment, and one and a half month’s rent for a furnished one. On the other hand, states such as Illinois and Teas do not have any limits on the amount a landlord can collect.
2. Credit score
This is another factor that landlords/property management companies use to determine the security deposit to be paid. Prospective tenants that have low credit scores are considered to be less dependable, hence the amount that will be set for them as a security deposit will be higher than usual. Some landlords even go as far as setting a particular score that they hold prospective tenants against in order to determine if they are eligible. Therefore, before you apply for an apartment, consider checking your credit score to determine whether it could potentially affect the security deposit to be paid.
3. Preferences of the landlord
In states where there are no required limits, it falls on the landlord to determine how much you will pay as a security deposit. The most you can expect to pay is three months’ worth of rent, while the least amount charged may be half the monthly rent.
4. Property amenities
There are amenities that could warrant higher security deposits such as:
- A washer/dryer in the unit
- A doorman
- An elevator within the building
However, if the state has limits on the security deposit, a landlord cannot charge you more than the required amount regardless of the amenities provided.
If the amount of the security deposit is not determined by the state, a landlord may adjust it to be at par with what other landlords are charging. This is way, they can attract prospective tenants and avoid being edged out by competitors.
Payment and storage of the security deposit
Before you move into a rental unit, your landlord/ a property management company will most likely provide you with a comprehensive list of what you are expected to pay before you move in.
Once you make the payment, the money should be securely stored by the landlord. Many states usually require the landlord to keep the security deposit in an interest-bearing account that is separate from their personal account.
Some state laws require that the landlord provides you with a receipt after collecting the security deposit, which should include the amount of the deposit paid, the name and address of the bank where the security deposit is being kept, and the annual interest that the deposit will earn. Depending on where you live, you may be entitled to the interest earned by the deposit, with most landlords turning the interest to the tenant at the end of the year or adjusting one month’s rent in order to make up for it.
Getting your security deposit back
Generally, security deposits are refundable. Here are some guidelines you can follow to get your money back.
1. Plan ahead
Before you move out, there are steps you can take to ensure that you will get your deposit back in full:
- If you have a short-term month-to-month lease, give your landlord the legally required 30-day notice to end your notice. This way, you won’t end up owing extra rent that your landlord can take out of your security deposit.
- If you are breaking the lease, make sure that you find another tenant to rent the unit.
- Always ensure that you are present during the final inspection of the unit before you move out. This way, you will know exactly what repairs, if any, that need to be taken care of.
- Confirm the final cleaning plans of the unit, and if necessary, ask for a comprehensive list of requirements so that you have a clear understanding of what you have to do. This ensures that you don’t end up insufficiently cleaning the apartment and missing out on part of your security deposit.
- If you have roommates and you are the only one leaving, negotiate with them or the landlord for the early return of your share of the deposit. Landlords don’t have any obligation to return the deposit until all co-tenants vacate the unit, so it is important you come to an understanding in order to get back your share.
- Make sure that you take photos and videos of the apartment in order to document your cleaning and repair efforts. This ensures that you have evidence in case of any dispute that may arise regarding the security deposit.
- Ensure that you give your former landlord your forwarding address. In some cases, a landlord may fail to return the security deposit simply because they cannot locate you within the specified timeline.
2. Understand the rules and regulations
Most states usually have strict laws regarding how and when landlords should return security deposits. If they choose to go against these laws, they may end up entirely missing out on the deposit.
The return timeline for the security deposit varies from one state to another. For example, in Alabama, a landlord is required to return the security deposit 60 days after you move out, while if you live in Hawaii, you can expect your security deposit back within 14 days of vacating a unit.
Deductions that can be made from the security deposit
Most states have a set deadline, typically 2-3 weeks after you vacate your rental unit, for the landlord to send mail the following details to your current address:
- An itemized statement that details how the deposit may have been applied toward repairs, cleaning, or back rent.
- The remainder of the deposit, including any interests that may have been accrued as required by your state.
- In some states, a list of deductions that are to be made is also included.
State laws typically allow the security deposit to cover the following:
- Cleaning the rental unit
- Repairing damage that may have been caused by you or your guests. Keep in mind that paying for normal wear and tear is not your responsibility.
- Any unpaid rent or unpaid utility bills.
Steps to take when your landlord refuses to give your security deposit back
It is not uncommon to disagree with your landlord when it comes to refunding of the security deposit. Steps you can take to resolve such issues include:
1. Work out a written agreement with your landlord
If the landlord does not send you an itemization or breaks the state laws regarding the return of the security deposit in any other way, you can come up with a written agreement that clearly outlines both of your expectations and sign it.
2. Write a demand letter
If the agreement you come up with does not work, write your former landlord a demand letter that asks for the return of the deposit. Make sure you include the main facts and reasons why your landlord owes you money, as well as any relevant letters and agreements. To show your landlords that you know your rights, cite any relevant state laws regarding security deposits.
3. Sue your landlord in small claims court
Suing your landlord should be your last option. Many states typically require you to write a demand letter before you resort to suing the landlord in small claims court.
- What happens to your security deposit if you get evicted? Once you get evicted, your former landlord has 30 days to give you a written notice mailed to your last known address that spells out his/her intention to lay a claim on your security deposit and the reasons for doing so. Without such a notice, the landlord has no right to impose a claim on the security deposit but may file an action for damages after returning the deposit.
- Do I have to pay the deposit and first month’s rent at the same time? Whether you are supposed to pay the deposit and first month’s rent at the same time or not entirely depends on your landlord. However, more often than not, landlords usually require that you pay them at the same time, so it is reasonable to be prepared to pay them upfront.