Security Deposits: What to Expect
Security deposits are a standard part of renting an apartment. As with all rental policies, it’s helpful to know what to expect before you sign on the dotted line. Here we answer all of your frequently asked questions about security deposits.
What is a security deposit?
Security deposits protect landlords when tenants cause damage beyond normal wear and tear and/or fail to pay rent. If your landlord has to repair a large hole you made in the wall after you move out, for example, he or she will deduct the cost from your deposit. Security deposits also demonstrate your financial stability — the ability to afford this and your first month’s rent likely means you are a low-risk tenant.
How much will my security deposit be?
Almost all landlords require security deposits, but what you pay will vary widely depending on the state you live in, your landlord’s preferences, and your credit score. New York state law doesn’t set a maximum deposit amount that a landlord can collect, while California statute limits security deposits to two months’ rent for unfurnished units and three for furnished. Most states fall somewhere within one to three months’ worth of rent, although landlords can always choose to charge less. If your credit is poor, on the other hand, your deposit may be closer to your state’s limit.
Is my security deposit refundable?
In general, security deposits are refundable — minus the cost of repairs or missed rent, if any. Most states require security deposits be held in escrow accounts, so your money never actually belongs to your landlord and he or she cannot spend it freely during your lease term.
One caveat to refundability: some landlords may require a non-refundable move-in fee in addition to or as part of your total deposit, which could cover application and screening fees as well as turnaround cleaning costs. This is less common and not as tightly regulated, so read your lease carefully and understand what you are paying for before writing a check.
What can my landlord deduct for?
Your security deposit is intended to cover damages that results from neglect or misuse, not normal wear and tear. This means that your landlord generally can’t deduct for a fresh coat of paint or small nail holes in the wall. However, what counts as “damage” is subjective and can cause tension between landlords and tenants.
To avoid any conflict, above all, take good care of your unit and return it in the same condition you found it in — or better — at the end of your tenancy. Read your lease carefully so you know what your landlord’s damage and repair policies are, and ask detailed questions before you sign about what he or she will withhold for. Take photos before you move in and make an itemized list of any existing damage, and keep receipts for any repairs you have to make out of pocket.
In many states, landlords are required to provide tenants an itemized list of damages discovered during a move-out inspection, so it’s helpful to have written records from before and during your lease term.
How long does it take to get a security deposit back?
Again, this depends on what state you’re in, but you can generally expect to receive the balance of your deposit within 30 days of moving out of your unit. Some states require landlords to return deposits within 15 days or as soon as they receive a tenant’s forwarding address, and many will penalize landlords for not meeting these deadlines. Check your state’s laws so you know your rights — if your landlord withholds your deposit past the legal time limit, you may be able to send a notice compelling him or her to take action. In any case, it’s a good practice to submit a formal request for your deposit along with your new address.