Security Deposit

What Is a Security Deposit? A security deposit is a refundable payment made by a tenant to a landlord before or at the beginning of a tenancy. The deposit serves as financial protection for the landlord against potential losses caused by the tenant, such as unpaid rent, property damage beyond normal wear and tear, or costs associated with lease violations. ## State Regulations Most states regulate security deposits, including: - **Maximum amounts** (commonly one to two months' rent) - **Where deposits must be held** (some states require separate escrow accounts) - **Interest requirements** (several states require landlords to pay interest on deposits) - **Return deadlines** (typically 14 to 60 days after move-out) - **Itemized deduction statements** (landlords must provide written explanations for any amounts withheld) ## Tenant Protections Landlords may only deduct from a security deposit for specific reasons permitted by law, such as unpaid rent, damage beyond normal wear and tear, cleaning costs to restore the unit to its original condition, and unpaid utility charges. Tenants who believe deductions are improper can challenge them, and in many states, landlords who fail to return deposits within the required timeframe face penalties of up to two or three times the deposit amount.