What Is a Security Deposit?
You’ve found your dream home to rent and now is the time to make sure you make the necessary payments to secure that apartment. Understanding the cost and terms of your security deposit is a key part of accepting your lease. Here’s the ultimate guide to what to expect when paying a security deposit to make sure you get the perfect apartment – and get your deposit back when you move out.
So, what is a security deposit?
A security deposit is an amount of money you provide to a landlord or property management company that serves as proof of your intention to move in and take care of the house or apartment you are renting.
You can think of your security deposit as an insurance policy for homeowners to protect against unpredictable residents. The landlord will keep your money in case you damage the unit (or fail to pay the rent). If you don’t follow the terms of your lease, you can lose those hundreds or even thousands of dollars.
The good news is that security deposits are supposed to be refundable. So if you know that you are a good resident and that you will leave a place that you rent in good condition, there is a good chance that you will get that money back. However, unexpected things can happen during your lease, so you want to know when a security deposit kicks in.
How much are you going to pay for a security deposit?
A few factors go into calculating a security deposit, so the typical amount will depend on your particular situation. The framework for calculating a security deposit also depends on the location of the asset. Some states do not set limits on security deposits, while others do. You may also need to add more to the overall deposit if you have a pet in your apartment. Generally speaking, a security deposit can be the same as your monthly rent and sometimes even more.
Your credit score also plays an important role in determining your security deposit. Landlords and property management companies can access your credit information and will use it to assess the level of risk you pose when renting. If your credit rating is low, your landlord may consider you a greater risk and thus charge you a larger security deposit. Checking your credit score in advance will help you know where you are before you start looking for an apartment.
Pro tip: Understand the differences between your security deposit and additional charges when calculating your expenses. The additional fees can range from a pet fee to an application processing fee, so make sure you don’t put them in the security deposit and that the owner or management company asks you for the money you already have. paid.
When will you pay your security deposit and when will you get it back?
You will need to pay the security deposit before you move in, usually with your first month’s rent. Many times the property management company or owner will give you a checklist of the payments you will need to make before you move into your new place. You need to make sure you receive your security deposit on time – failure to do so could cost you the apartment you want.
The time you can expect to get your security deposit back after moving also varies depending on where you live. A typical range is between 14 and 60 days after your move.
When does a landlord not return a security deposit?
You can expect the owner or management company to take small itemized expenses (for example, for a major cleaning or replacing a broken door handle) from your security deposit if you do not leave the unit in stellar form when you leave. Nonetheless, you usually won’t have your entire deposit withheld for small issues like this.
However, certain scenarios exist when a landlord or property management company can legally keep some or all of your security deposit. Examples include:
- Lease termination or early termination of the lease: If you break your lease, your landlord may keep some or all of your security deposit to cover costs that arise from that breach. Whether they do it or not and to what extent depends in part on the laws of your country and the wording of the lease, including early termination clauses.
- Non-payment of rent: Most states allow the landlord or management company to keep all or part of your security deposit to cover any income lost if you stop paying your rent.
- Non-payment of utilities: If you don’t pay your utility bills, you risk not getting your security deposit back. A landlord can keep this money to cover utilities you neglected to pay under the lease.
- Property damage: While homeowners usually can’t keep a security deposit to cover normal wear and tear (think: reasonable amounts of dirt, a few small stains on the carpet, dirty grout), they can keep it to cover actual damage to the property. . If you poke huge holes in walls, cause major water damage, crack a counter, or don’t return your keys at the end of your rental, expect to pay.
- Excessive cleaning costs: Likewise, homeowners usually cannot deduct your security deposit to cover normal cleaning costs. However, if you leave garbage all over your accommodation or if you don’t clean up an animal’s damage, the landlord may withhold your security deposit to cover the cost of cleaning or replacing.
Paying a security deposit is an essential part of the process for just about any location you want to rent. Knowing the ins and outs of how these deposits work can help you approach your apartment search with confidence, and then make sure you stick to the terms of your contract so you can get your security deposit back when you move out.
Are you looking for a new place? Search thousands of apartments for rent on Zumper and find your new home.