Security Deposit Deductions: What’s Allowed?
A security deposit is cash that the tenant pays the landlord before entering the rental property management. The money covers the landlord if the tenant damages the property or does not pay rent. When the tenant leaves, the landlord examines the property and determines how much of the deposit must be paid back. But not every reason qualifies for withholding part of the deposit. This article explains what landlords can legally deduct from a security deposit and what they cannot.
What
Is a Security Deposit?
A security deposit is a set sum of money a tenant pays a landlord before taking occupation. It is not rent. The landlord holds this
deposit throughout the lease tenure and refunds it at lease termination, less
any legal deductions. The amount and regulations can differ by area, but the
general concept is the same everywhere.
Why
Do Landlords Ask for Security Deposits?
Landlords request security deposits so they can guard their
property. It pays for:
·
Unpaid rent
·
Damage that is not ordinary wear and tear
·
Cost of cleaning (if required)
·
Removal of abandoned property
It causes tenants to maintain the property and act according
to the terms of the lease agreement.
What
Can Landlords Deduct from a Security Deposit?
Landlords may only deduct for valid reasons. The most usual
deductions are:
1.
Unpaid Rent
If the tenant vacates the premises without remitting the
entire rent, the landlord can withhold the outstanding amount from the deposit.
This also goes for if the tenant prematurely terminates the lease without
notice or sufficient reason.
2.
Damage Exceeding Normal Wear and Tear
Normal wear and tear refers to minor changes that occur due
to normal use. For instance, worn-out carpets, tiny nail holes, or faded paint
are normal. However, extensive damage such as broken windows, torn walls, or
dirty carpets can enable a landlord to charge money from the deposit.
3.
Cleaning Costs
Landlords are only allowed to deduct for cleaning if the
tenant vacates the property extremely dirty. This does not account for regular
dust or minor smudges. However, if the tenant vacates with trash, dirty
bathrooms, or stained kitchen spaces, the landlord can charge for professional
clean-up.
4.
Abandoned Furniture or Personal Items
If the tenant also vacates furniture, clothes, or any items,
the landlord may have to pay to take them away. Removal or disposal charges can
be deducted from the deposit.
5.
Unpaid Utilities (if stated in the lease)
In certain instances, tenants pay utility bills of utilities
directly. If the lease indicates this and the tenant vacates without paying,
landlords can deduct those charges if they paid them.
6.
Replacement of Keys or Remote Control
In case the tenant does not return the keys, remotes, or
access cards, the landlord can deduct the price of replacement or
reprogramming.
What
Cannot Be Deducted from a Security Deposit?
It is not just legal, but also unjust for a landlord to
retain a portion of the deposit for some reason. The following are not
permitted:
1.
Normal Wear and Tear
As noted, such items as worn paint, slightly used carpets,
or small scuff marks are inevitable over time. These are not the fault of the
tenant, so no deduction is to be made.
2.
Renovations or Upgrades
If the landlord wishes to upgrade outdated fixtures or add
new appliances when the tenant vacates, they may not deduct these expenses from
the deposit unless the tenant's damage necessitated the change.
3.
New Tenants' Attracting Costs
Charges such as advertising the rental space or hiring
professional photographers are business expenses. The landlord cannot use the
deposit to cover these.
4.
Changes in Personal Preference
If the tenant changed the colour of a wall but the landlord
did not object or prohibit it during inspection, it cannot be deducted unless
there was a policy in the lease that required the return to paint colour.
What
Is Normal Wear and Tear?
It is essential to realise the distinction between wear and
damage. Examples are provided below:
|
Normal Wear and Tear |
Damage |
|
Faded or chipped paint |
Large holes or writing on walls |
|
Loose door handles |
Broken doors or missing handles |
|
Worn carpet in walkways |
Burn marks or large stains |
|
Minor scratches on the floors |
Deep scratches or broken tiles |
|
Dust buildup |
Mould due to the tenant’s neglect |
How
Should Landlords Handle Deductions?
If a landlord intends to deduct from the deposit, some steps
must be observed:
1.
Document Everything
Landlords ought to document the property by taking photos
when a tenant moves in and when they vacate the premises. Written reports of
inspections also serve to demonstrate the difference.
2.
Provide a Detailed List
Most jurisdictions compel landlords to forward an itemised
list of deductions. It should contain:
·
The reason for each deduction
·
The amount
·
The receipts or bills, if they exist
This list should be provided within the time frame specified
in local law (normally 14 to 30 days following move-out).
3.
Return the Balance
Following deductions, the landlord is required to refund the
remaining balance of the deposit to the tenant within the statutory period.
How
Can Tenants Secure Their Deposit?
Tenants can prevent deductions by doing the following:
1.
Read the Lease
Know what the lease indicates concerning cleaning, repairs,
and deposit disbursement. Adhering to these stipulations will avoid future
misunderstandings.
2.
Conduct a Move-In Inspection
Take photos and note any damage that was already there
before moving in. Share this with the landlord to avoid being blamed later.
3.
Maintain the Property
Keep the rental clean and report maintenance problems
quickly. This helps prevent larger damage.
4.
Clean Thoroughly Before Moving Out
Remove all personal items, vacuum carpets, scrub the kitchen
and bathroom, and take out trash. This can help avoid cleaning charges.
5.
Do a Walk-Through with the Landlord
When feasible, do a walk-through of the property with the
landlord before move-out. They can identify any issue that needs to be
repaired.
What
if There's a Dispute?
At times, landlords and tenants disagree on deductions.
Here's what can be done by tenants:
1.
Ask for Proof
Tenants can request receipts or photographs indicating the
basis of deductions.
2.
Negotiate
In most situations, the landlord and tenant can agree by
talking through the problem.
3.
Send a Written Request
If the landlord refuses to return the deposit or will not clarify
deductions, tenants must send a written request. It should contain:
·
The rental address
·
The move-out date
·
The amount due
·
A request for return or breakdown
4.
Take Legal Action
If the issue isn't resolved, the tenant can sue the landlord
in small claims court. It is advisable to have everything at hand, including
all pictures, emails, and documents.
Local Laws Matter
Security deposit laws vary across states and nations. They
can establish regulations regarding:
·
The amount a landlord can charge
·
The time limit to refund the deposit
·
The interest to be paid on deposits held
·
The requirement for landlords to keep deposits
in separate accounts
Landlords and tenants must review local laws to prevent
errors.
Tips for Landlords
To remain fair and prevent legal issues, landlords must:
·
Utilise a standard move-in/move-out form
·
Take crisp photos of the property
·
Have all receipts and invoices for repairs on
hand
·
Make it clear in the lease regarding deposit
policies
·
Return the deposit (or deduction notice)
promptly
Tips for Tenants
To receive your entire deposit back, tenants must:
·
Obey the rules of the lease
·
Clean the property thoroughly
·
Repair minor damage before departure
·
Return remotes and keys
·
Provide a forwarding address for deposit return
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