Are security deposits refundable? Are rental deposits refundable under all circumstances? You are not alone if you ask yourself these questions when you begin the search for the place of your dreams. Find out what every tenant needs to know to get security deposit refunds.
What are security deposits?
Before you consider whether security deposits are refundable, you will want to understand precisely what security deposits are. After all, these payments are standard when renting an apartment or a house. The security deposit is a predetermined amount that you pay your landlord before you move into a property. Your landlord keeps this money until the end of your tenancy.
Security deposits are typically one month’s rent, although there are a few factors that determine exactly how much you’ll need to pay. For example, some states set limits on the amount a homeowner can request for a security deposit. A homeowner may also assess a higher security deposit if your credit rating is low. The landlord may interpret the low credit rating to mean that you are having difficulty making payments.
Many property owners and managers ask for a security deposit. Don’t let the requirement surprise you. Include the cost in your move-in plans. Checking local and state laws and your credit score will also help you prepare in advance for your big move.
Are security deposits refundable?
Is a security deposit refundable? Are rental deposits refundable? Well, yes, but the answers are a little more complicated than a simple yes or no. Generally, if you leave the rental property in good condition, your security deposit will be refunded.
There are two specific reasons a landlord cannot spend the money you donated for your security deposit:
- You have caused property damage that goes beyond normal wear and tear
- You must repay rent or other required payments
If you damage the property, your landlord may apply the security deposit for repairs or replacements. For example, if you’ve broken a window or caused permanent damage to the walls, your landlord can use your security deposit to make the necessary repairs instead of giving you a refund.
The good news is that many states have laws regulating how homeowners can use security deposits. While you live in the property, your landlord will likely keep your security deposit in an interest-bearing account. Laws require your landlord to return your deposit, less any expenses noted during a moving inspection, at the end of your lease. When you move out, your landlord will deduct the amount needed to cover the cost of the rent due or damages from the overall deposit.
If you’ve caused significant damage or haven’t paid a large portion of your rent, you could lose your entire security deposit. You could lose part of your security deposit if your landlord has to make small repairs. And if you are up to date on your rent payments and leave the unit in excellent condition, you will get the full security deposit refunded.
Again, it’s always a good idea to familiarize yourself with the regulations and laws pertaining to landlord-renters in your area. Although security deposits are technically refundable, your landlord has many legal reasons to withhold your deposit.
Is a security deposit refundable if you damage the unit?
Property damage is a big reason tenants lose their security deposits. There are a few steps you can take to make sure you leave the property in the best possible condition when you move:
- Return everything to its original condition: If you’ve changed the arrangement of furniture or window treatments, change them. You will have a better chance of getting your security deposit refunded.
- Remove the nails and screws: If you put nails or screws in the walls or ceiling, remove them. Some homeowners will ignore small nail holes, but that’s not always the case. Spackle holes to fix them.
- Replace whatever you broke: Loose shelves, broken tiles, and other essentials are forcing you to fix or replace anything you’ve damaged. Negligence does not fall under the category of normal wear and tear.
- Clean: For example, scrub the oven, then clean the bathroom and appliances. Otherwise, you will likely find a deep cleaning fee on your security deposit deduction list.
- Inspect the property with your landlord: Before you go, arrange a moving inspection with your landlord. Your landlord can point you to items you didn’t notice and give you a chance to fix the issues.
Is a security deposit refundable if you owe your landlord money?
You could also lose your security deposit if you have unpaid charges, including the following:
- Unpaid utilities
- Unpaid municipal permit fees
- Unpaid rent
Take a few extra steps before you move to make sure you don’t lose your security deposit due to missed payments:
- Give notice: Look at your rental agreement to verify the termination clause of your lease. Your lease should contain information about the notification you should give before a moving date. Thirty days before the end of a lease is common, but check your specific agreement to make sure. Give your opinion in writing and don’t just rely on verbal agreement. If you do not deliver your notice within the time limit set in your rental agreement, this oversight could cost you a month’s rent.
- Separate your rent from the security deposit: Many tenants mistakenly think that the security deposit is their last month’s rent. Unless you have agreed to this arrangement before, you will need to pay your last month’s rent separately from a security deposit.
- Give your new address: Make it easy for your landlord to return your deposit to you. If you forget to leave a forwarding address, your landlord will have no way of getting your money back.
Although security deposits are refundable, you should make sure you are on top of all payments and keep the apartment or house in good repair. This way, you will get the money you paid as a security deposit back when you move into your next home.