What is a Security Deposit? Everything You Need to Know

What is a Security Deposit?

A security deposit is a landlord’s way of guaranteeing that [s]he will be compensated for

any damages that may occur while a tenant is living on their property. This deposit cannot be more than one month’s rent.

Where does my deposit money go once I give it to my landlord?

If the building in which you are moving into has more than six units in it, the landlord must put your money into an interest bearing savings account. The interest which this money may accumulate will belong to you. If your building is less than six units, your landlord may still deposit your money into an interest bearing account; he [s]he does so, [s]he should pay you the interest. The landlord in either situation is allowed to keep 1% of the interest for expenses. It is a good idea to ask your landlord about this before moving in.

Can I use my security deposit to pay my last month’s rent?

No, unless the landlord agrees to it. Your security deposit is just that: a deposit of secured funds to pay for damages that you may cause while moving in/living in or moving out of the landlord’s property.

How long can a landlord hold a security deposit after I move?

Though many people count on using their security deposit for moving expenses, this is often not possible. The landlord does not have to give you the security deposit back the day that you move out. [S]he may hold it for a “reasonable time” after you move out. If [s]he does not return your deposit after 15-30 days, find out why. If [s]he promises to get you the money by a certain date, write a letter. Where a management company is involved, processing the return of the security may take longer.

What happens if I do cause some type of damage to the property?

The landlord may deduct a portion of the security deposit to cover the cost of the damages, and what is left over from that will be given back to you. If the damages are bad enough, the landlord may keep the entire security deposit.

What if the damages are more than the amount of my security deposit?

The landlord may take you to Small Claims Court to recover any and all damages that the security deposit did not cover.

Can my landlord keep my security deposit even if I did not cause any damage to the property and I do not owe any rent?

No. Your landlord cannot keep the security deposit if you have not caused any damage to the property and you don’t owe rent. If this happens, you should immediately file a claim in Small Claims Court against your landlord to recover your money. Also, file if you dispute the amount of money the landlord has deducted from your security deposit.