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Security Deposits

What Is a Security Deposit?

Very often, when a landlord and a tenant enter into a lease agreement, the landlord requires the tenant to make some type of payment to the landlord in addition to the first month’s rent. The payment serves as security that the tenant will return the leased premises to the landlord, at the end of the lease term, in substantially the same condition as when the parties entered into the lease agreement.

How Much Can a Landlord Charge for a Security Deposit?

The amount that a landlord can charge for a security deposit is governed by state law. The law varies from state to state. Usually, the amount of a security deposit is one to two months’ rent. The lease agreement between the parties should set forth the amount of the security deposit, as well as the manner of payment.

How Must the Landlord Maintain the Security Deposit During the Tenancy?

Here again, the law of each state varies. Many states require landlords to maintain security deposits in a separate account and to pay simple interest on the security deposit to the tenant at the time the landlord returns the security deposit.

Deductions against the Security Deposit/Tenant’s Accounting

The answer to this question lies in the applicable state law and the lease agreement between the parties. Typical items of deduction from a security deposit are as follows:


  • unpaid rent;
  • repairs for items beyond normal wear and tear; and
  • refuse removal.

Typically, when a landlord makes a deduction against the security deposit, the landlord must notify the tenant of the reason for the deduction and provide the tenant with some type of evidence (for example a receipt) as to the basis for the deduction.

The law of most states requires landlords to return security deposits within a fixed number of days and provides penalties in the event a landlord fails to make a timely return of a security deposit.

More Information

For more information on the law governing security deposits in your state, consult the landlord/tenant section of the applicable statute or an attorney.

Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.

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