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What is a security deposit?
A security deposit is money a tenant pays at the start of a lease. The landlord holds it and uses it to cover unpaid rent or damage beyond normal wear and tear when the tenant moves out. Whatever isn't needed goes back to the tenant.
In a little more detail
Think of it as a safety net for the landlord. It isn't extra rent, and it isn't the landlord's money to spend. Most of the time it sits untouched for the whole lease and then gets returned.
Most states put rules around deposits: how much you can ask for, where you keep the money, how quickly you have to return it, and what you need to send the tenant if you keep any of it. Those rules vary a lot from state to state, and some cities add their own.
- Rent is $1,500 a month and the tenant pays a $1,500 deposit when they sign.
- At move-out, the walls have the usual scuffs (normal wear) and one broken blind that costs $60 to replace.
- The landlord returns $1,440 with a short written list showing the $60 deduction.
Things to watch
- Check your state's limit before you set the amount.
- Do a move-in inspection with photos. It's your proof at move-out.
- If you keep any of the deposit, send an itemized list. Many states require it within a set number of days.
A ready-to-use letter for listing deductions and returning the rest.
This is a plain-English explanation, not legal advice. Rules vary by state and city, so check your local law or talk to an attorney before you act on it.
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