Tenants and landlords both have to take risks when executing new leases. Tenants have to commit themselves to regular payments despite the possibility of losing a job or other financial challenges. They have to accept limitations on their use of the property and the risk of becoming unable to renew the lease.
Landlords have to risk the possibility of tenants doing something illegal, failing to pay rent or damaging the unit. Typically, residential landlords collect security deposits as a means of protecting themselves against the worst-case scenario when signing a new lease agreement.
Tenants usually hope to receive their security deposits back after they end the lease. Sometimes, they don’t receive their deposits back. What situations justify a landlord making a claim against a security deposit?
Only special circumstances warrant retaining the deposit
Landlords have an obligation to keep a security deposit separate from their business funds and to return it to the tenant after the end of the rental agreement unless there is justification to retain a portion of the deposit. Landlords usually can only retain a security deposit to recoup unpaid rent or recover losses related to property damage.
In either case, they usually need to advise the former tenant in writing of the reason for retaining the security deposit and the amount of the deposit they intend to retain. The landlord typically has 45 days after the end of the tenancy to provide the tenant with an itemized list of all damages and expenses that reduced the amount of the security deposit returned to them.
Standard wear and tear based on use and the depreciation of amenities over time does not justify the retention of the security deposit. Worn carpet, faded paint and aging appliances are not valid reasons to make a claim against a deposit. Burns in the carpet, holes in the wall and other forms of obvious damage could give rise to claims from the landlord.
Tenants typically complete an inventory sheet itemizing any issues with the property when they assume tenancy, and that provides the basis for comparison when they leave. In cases where there are disputes about claims against the security deposit or the amount of the claim, both parties may need assistance to prevent the matter from snowballing into a major legal debacle.
Learning about how state law limits security deposit claims can be beneficial for both parties who have signed a residential lease. People facing legal controversy related to a residential lease may need the help of an attorney to resolve the matter, and that’s okay.