Ultimate Guide to Security Deposits for Renters 2021 | Roost
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Ultimate guide to security deposits for renters 2021

For most, getting our security deposit back is not just a “nice thing” to happen or a bit of “fun money.” It’s money needed to help cover moving expenses. Many renters get frustrated when trying to get their deposit back. Some even give up trying. But why should you? It is your money. 

Your lease legally defines what portion of your deposit may be due back to you after moving out and when it needs to be paid to you. While state and local laws vary, most should expect their deposit back within thirty days of moving out, along with an itemized list of deductions.

With the average rent now being $1900 in the U.S. for a two-bedroom apartment, many can expect to pay around that much for the deposit too, making the move-in cost nearly $4000(!) including additional fees. Having almost two grand tied up in a deposit for the lease term is a lot of money.   

This guide explores everything about security deposits, your legal rights to your security deposit refund, and alternative options for securing the security deposit if you are financially challenged.

Renters in the United States hand over $45 million of their savings in the form of security deposits to landlords every year. 

Security deposit refund stats

  • $45 billion worth of renter’s savings is trapped in security deposits
  • 87% of renters pay a security deposit that averages $600  
  • 60% of landlords provide a move-in checklist of items that get deducted from security deposits
  • Only 40% of renters take pictures of their unit at move-in
  • Only 29% of renters believe their landlord is clear on how to get 100% of the security deposit back
  • 60% of bad property reviews are due to mismanagement of the return of the security deposit
  • 55%+ of renters split the security deposit with a roommate(s) 

Source: Roost 2020 Survey, property management, state security deposit statutes

Our research shows that many renters are hazy and unclear about their rights and how to get their security deposit back. Nearly half don’t expect anything at all.  Many feel like they are at the mercy of the property management company when trying to get their deposit back. But that is not true. Renters have rights.

Your lease will define how much deposit is required and how much is refundable and what portion may not be refundable. Many move-in packages also include a move-in checklist to help you record the status of the rental unit before you move in. The lease should also define the move-out process and how long the rental company has to return your deposit.

What is a security deposit for?

A security deposit is an upfront payment your landlord requires before moving in — typically the equivalent of one month’s rent.  The money is used to fix or replace items in your rental unit when you move out.  By law, your landlord can’t use it for anything else.  Once you move out, your apartment is inspected for damages, costs for repairs are deducted (if any),  and a refund (if any) is sent back to you.

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In a well-known study, it was discovered that 40 percent of Americans could not come up with the cash funds to handle a $400 emergency expense. That also means many also find security deposits to be cost-prohibitive. Part of understanding security deposits is learning how much a landlord can legally ask for a security deposit. We’ve found that local laws vary. Your state or local laws may limit how much can be charged. If you think your potential landlord is asking for too much, check out your Virginia renters rights on Roost or consult with a local housing advocate.

How much is a security deposit?

Most rentals charge the equivalent of one month’s rent for a security deposit.  If your credit, employment, and background check are favorable, you may be eligible to pay less. A handful of states allow landlords to charge more, but nearby properties’ market rate usually prevails.  If you are part of a HUD rental assistance program, your security deposit may be as little as $50.

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How to get your security deposit back

With sample security deposit demand letter

Most renters are so excited to move into a new place or stressed by the moving process that they forget to take the time to do the things they need to do to help them get their deposit back later. Before you move your belongings into your new place, take a few very important minutes to carefully review the apartment before you move in.

10 Steps: How to get 100% of your security deposit back 

  1. Complete your move-in checklist. This is your chance to document every ding, hole, and blemish prior, so you are not blamed for it when you move out.  
  2. Hand in your checklist, but keep a copy of it for your records. Also, take “before” photos of your apartment in addition to the checklist. 
  3. Read the security deposit section of your lease — what’s allowed and not (e.g., holes in the wall for pictures, wallpaper, paint). Follow the terms and be prepared to pay for specified damages if applicable. 
  4. Report maintenance issues when they happen. This serves to document existing damages, so they’re not confused as to your liability at move-out.
  5. Clean your entire apartment. Return it to the same state you received it (match your pictures). 
  6. When you move out, ask for an exit-inspection to identify anything you might be at risk of for a security deposit deduction. Then fix it. 
  7. Return all your keys. 
  8. Send a security deposit refund letter or email (see below). 
  9. Make sure to give your landlord a forwarding address. Most properties refund security deposits by mail. If you do not leave a forwarding address, your deposit goes unclaimed. 
  10. Know your IP+state law and protections if your landlord does not follow the law. You may be eligible for 2-3X a security deposit refund as a result.
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Security deposit refund sample emails

How to write a security deposit refund letter

One of the most important steps to getting your deposit back is ensuring that your previous landlord has your new mailing address on time. Many state laws provide the landlord with protection if they don’t know your new address or are not informed within the legally allowed amount of time. If you don’t know your next address, give them a trusted temporary mailing address. Make sure to document how and when you shared your mailing address with your previous landlord.

What reasons can a landlord keep my security deposit?

A landlord can charge for damages and bills due. The most common deductions taken from the security deposit are:

  • Cleaning fees
  • Missing keys, entry cards, or fobs
  • Damages to blinds and screens
  • Holes or chips in walls
  • DIY repairs – e.g., you painted the wall but didn’t match the paint exactly
  • Pet damage (urine, scratched floors, chewed blinds)
  • Broken appliances
  • Unpaid utilities or fees
  • Unpaid rent
  • Property abandonment – the landlord has to pay someone to remove left behind items
  • Early lease termination or not giving enough notice

If you hit hard times and have to move early because your roommate moves out, you lose your employment or become ill, or a family emergency occurs, you may face a situation of not getting your full deposit back. If you move out before your lease is up, you may have to pay the remainder of your lease. If your roommate damages the apartment, you may have to pay for repairs. Or, if you move out owing money for back rent, your landlord may keep your deposit or take you to court in an attempt to recoup their losses.

You do not want to end up in this situation. But if it happens, try to communicate with your landlord about getting out of your lease without owing a bunch of money. If they know they can rent the apartment quickly, they may let you out of the lease. Or, they may allow another renter to take over the remainder of your lease. Whatever the situation, talk with your landlord about it before they take legal action.

Security deposit laws every renter should know

  • How much can be charged. Varies 1-3X rent. Usually, 1X the rent.
  • Where your money will be saved. Most states do not specify, but a growing number requires it to be held in a state bank account or escrow account. 
  • Interest bearing. Only a handful of states specify tenants are entitled to accrued interest. 
  • Written notice: If you live in states like Pennsylvania, Tennessee, Washington, or Wisconsin, you’re entitled to receive written notice of where your deposit is held. 
  • Deductions. Most states include some language in the statute guiding what a landlord can deduct for minimum repairs exceeding wear and tear. Some states specify unpaid rent, utilities, and cleaning. 
  • Inspections. Many states do not require an inspection to be offered. However, if you ask for it, most landlords will comply.
  • How the deposit is returned. See Roost’s security deposit by state guidelines. Most states require the deposit to be returned minus the deductions within a specified number of days. This could be 15, 20, 30, or as long as 60 days from move out. Most states now require the landlord to provide you with an itemized list of deductions. Some states even require receipts as proof. 
  • Max penalty you are entitled to if not returned. Most states allow you to recover damages in small claims court if your landlord unlawfully withholds the deposit or neglects to follow the law in processing the refund. Damages range from ($200 + the full amount of the deposit) to as much as 3X the full amount or up to $10,000, depending on the state you live in. 
Related Article:

Virginia Security Deposit Refund Law

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If you cannot pay your deposit or simply do not want your money tied up in someone else’s savings account for a year or more, you may benefit from exploring deposit alternatives. You may be able to find an apartment, especially a new apartment development, that offers down payment insurance or an alternative to paying a traditional down payment. You will still need good credit for this option, but you will not be required to pay as much upfront. If your credit is marginal or you have other issues, you may need to consider getting a lease guarantor.

What are security deposit alternatives

If you don’t have the full security deposit amount or if you don’t want your money stuck in the deposit for the term of your lease, you have a few options. These options allow you to retain more of your savings by covering the deposit for you or offering you a low-payment loan.

  • Security deposit loans: These are personal loans that lend you money for your security deposit.  Some will transfer the funds in as soon as 24 hours.
  • Security deposit insurance: You pay a non-refundable monthly fee instead of a deposit — typically around $25-50 per month. This type of insurance guarantees your landlord to recover damages up to a certain amount.  The downside is that this adds to your monthly expense and you don’t get it back. 
  • Security deposit bonds: In this situation, you pay a non-refundable monthly fee to a third party that acts as a guarantee to your landlord that they’ll be protected if you fail to pay for unit damage or skipped rent. Like the insurance, it’s another monthly expense you don’t get back. 
  • Security deposit assistance: If you qualify, you may be able to receive forgivable rent assistance through government, non-profit, or charitable organizations.

Renters often have a lot of questions about security deposits. You are not alone if you are wondering the whats and whys about security deposits. And why wouldn’t you? It is your money tied up in another’s savings account earning interest while you cannot access it. If you are the type that always pays your rent and leaves an apartment pristine when you move out, it is normal to be frustrated about giving up access to your hard-earned cash for “no reason.”

The better you understand the legalities tied to security deposits, the better chance you have of receiving your deserved portion of your deposit back. And if you don’t, you know what legal actions you can take if needed.

Photos that can help you get your security deposit back

To help protect your security deposit, you should take pictures and video of the rental BEFORE you move in to document its condition. To help you recover 100% of your security deposits, make sure to take pictures of the following areas (and add commentary to your video of each space).  

  • Flooring
    Make sure to capture any stains on the carpet and scrapes on the floor.
  • Windows
    Take pictures of the window coverings, window latches and locks, and the glass.
  • Walls
    Make sure to take pictures of any holes in the walls, damaged wallpaper, bad repair jobs, or scrapes.
  • Appliances
    Capture any damage to the appliances, including inside the oven, freezer, and refrigerator.
  • The outside
    Don’t forget to take pictures of any damage in the garage, storage areas, parking structures, and landscaping.

Send a copy of the images and video to your rental company and keep a copy for yourself.

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Security deposit: Frequently asked questions

When do I pay the security deposit?

You will be asked to pay the security deposit as part of the lease signing process. Most landlords today prefer it be paid online, via ACH or debit/credit card payment.

When will I get my security deposit back? 

When you receive the returnable portion of your security deposit is governed by state law, typically 15-31 days after you move out.  It will also be defined in your lease agreement. It’s always a good idea to send a security deposit request letter with your forwarding address as part of the move-out process. 

Can I legally use my security deposit as last month’s rent?

In most cases, only if your landlord allows it. Your lease will likely be able to answer this question for you. The security deposit is intended to cover repairs and cleaning costs. If you don’t pay your rent, of course, they will keep it to cover your rent. But you may end up with an additional bill for cleaning and repairs. Laws vary, so you’ll want to review your local tenant-landlord laws for more information.

How do I manage the security deposit refund with a roommate?

To avoid problems with your roommate, how the deposit refund will be managed should be defined in your roommate agreement. If the apartment is in your name, meaning the roommate is not on the official lease, you are responsible for paying your roommate their deposit back after they move. If you are both on the lease, and both choose to end the tenancy, the landlord will pay back the deposit. If just one roommate moves out early, the other roommate will have to pay the deposit back.

What can a landlord deduct from a security deposit?

What expenses a landlord can deduct from the security deposit is defined in your lease agreement. While they cannot charge you for normal wear and tear, they can deduct for cleaning costs, unpaid bills, and repair costs.  The landlord should provide you with an itemized list of the expenses. Local laws vary, so review your local tenant-landlord laws for specific information.

Can I sue my property management company for withholding my security deposit?

Yes, you can. However, you should try other means first. Send them a demand letter and document all communications. Ask them for an itemized list that explains why they are not returning your security deposit. If your landlord does not pay you and doesn’t explain to you why, you can file against them in your local small claims court.

How long do you have to sue for a security deposit? 

This varies by your local area. In some states, you have years to file. Many states allow you to file up to four years later. You will need to consult your state’s statute of limitation laws to learn more. If you win your case, you may also be awarded court fees.

How do I get my security deposit back from my roommate?

Your first step to recovering your deposit is to review your lease. Either your agreement with the landlord or your roommate agreement. If you paid your roommate directly, they are responsible for returning the proper portion of the deposit to you. If you signed a lease with the landlord, the landlord is responsible for returning your portion of the deposit. If you are moving out before the lease is up, you may not be eligible to receive your deposit until the end of the tenancy.

What kind of deposits can a landlord collect from me when I move in?  

Generally, a landlord can collect an unreturnable deposit (such as for carpet cleaning), a returnable portion, and perhaps a pet deposit. The unreturnable portion you will not receive back. It is intended for routine cleaning after you move out. The returnable part is intended to cover unpaid bills, damages, or unreturned property (such as furnishing in a furnished apartment). Your pet deposit may be returned if your pet doesn’t cause any damage to the apartment or landscaping.

What kind of fees can the landlord charge me?

Your landlord may charge you various fees such as late, amenity (gym, laundry), early termination, online credit card processing, application, attorney, parking, and storage fees. Here are 9 hidden fees to watch out for.

What is “normal wear and tear?”

In most cases, landlords cannot charge for what is considered normal “wear and tear.” Typical damage for regular use is to be expected, such as mild carpet damage, fading paint, and aging appliances. If you cause excessive damages such as holes in walls or heavily stained carpet, you may be charged for those types of damages.

Is there a requirement that the landlord pay me the interest accrued on my deposit money?

This varies by location and more. If your landlord is required to pay you accrued interest, it should be stated in your lease. If you do not see this information in your lease, check out our easy reference state-by-state summary.

Am I entitled to get my security deposit back if I break my lease? 

In most cases, if you break your lease early, the landlord may be entitled to keep your deposit to go towards the unpaid rent. For example, if your lease ends December 31 and you move out in October, the landlord will attempt to collect the November and December rent.  They may allow you to apply the security deposit as part of it. 

Does my landlord have to show receipts for damage deducted from my deposit or charged to me? 

Only a few states require this, but that doesn’t mean you can’t ask your landlord for proof of damages and receipts. It will also help if you took pictures before you moved as proof of the status of the rental before you moved in. If your landlord does not provide proof, you may be able to file against them in small claims court.

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