Are security deposits refundable? Are rental deposits refundable in all circumstances? You’re not alone if you’re asking yourself these questions as you start the search for your dream place. Find out what every renter needs to know when it comes to getting security deposits refunded.
What are security deposits?
Before delving into whether security deposits are refundable, you’ll want to understand precisely what security deposits are. After all, these payments are standard when renting an apartment or house. The security deposit is a predetermined sum you pay to your landlord before you move into a property. Your landlord holds onto this money until your tenancy ends.
Security deposits are commonly equal to one month’s rent, although a few factors determine the exact amount you’ll need to pay. For example, some states set limits on the amount a landlord can ask for a security deposit. A landlord may also assess a larger security deposit if you have a low credit score. The landlord can interpret the low credit score to mean that you have difficulties keeping up with payments.
Many landlords and property managers ask for a security deposit. Don’t let the requirement surprise you. Budget the cost into your move-in plans. Checking local and state laws and your credit score will also help you prepare ahead of time for your big move.
Are security deposits refundable?
Is a security deposit refundable? Are rental deposits refundable? Well, yes, but the answers are slightly more complicated than a simple yes or no. Generally, if you leave the rental property in good condition, you’ll get your security deposit refunded to you.
A landlord can only spend the money you gave for your security deposit for two specific reasons:
- You caused damage to the property that goes beyond normal wear and tear
- You owe back rent or other required payments
If you damage the property, your landlord can apply the security deposit toward repairs or replacements. For example, if you broke a window or caused permanent damage to the walls, your landlord can use your security deposit to make necessary repairs instead of refunding the money.
The good news is that many states have laws regulating how landlords can use security deposits. While you’re living in the property, your landlord will likely keep your security deposit in an interest-bearing account. Laws require your landlord to return your deposit, minus any expenses noted in a move-out inspection, when your lease ends. When you move out, your landlord will deduct the amount needed to cover the cost of rent owed or damages from the overall deposit.
If you caused significant damages or didn’t pay a large portion of your rent, you might lose your entire security deposit. You could lose a part of your security deposit if your landlord needs to make smaller repairs. And if you’re current on your rent payments and leave the unit in excellent condition, you’ll get the full security deposit refunded.
Again, it’s always good practice to become familiar with landlord-renter regulations and laws in your area. While security deposits technically are refundable, your landlord has many legal reasons to withhold your deposit.
Is a security deposit refundable if you damage the unit?
Property damage is one significant reason that renters lose their security deposits. You can take a few steps to make sure you leave the property in the best possible condition when you move out:
- Put everything back in its original condition: If you changed the arrangement of furniture or window treatments, change them back. You’ll have a higher chance of getting your security deposit refunded.
- Remove nails and screws: If you put nails or screws in the walls or ceiling, take them out. Some landlords will disregard small nail holes, but that’s not always the case. Spackle holes to repair them.
- Replace anything you broke: Loose shelves, broken tiles, and more essential items require you to fix or replace anything you damaged. Neglect doesn’t fall into the normal wear and tear category.
- Clean up: For example, scrub the oven, then clean the bathroom and appliances. Otherwise, you’ll likely find a deep-cleaning fee on your list of security deposit deductions.
- Inspect the property with your landlord: Before you leave, set up a move-out inspection with your landlord. Your landlord might point out 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 might also lose your security deposit if you have any unpaid costs, including the following:
- Unpaid utilities
- Unpaid municipal permit fees
- Unpaid rent
Take a few additional steps before moving out to make sure you don’t lose your security deposit due to missed payments:
- Give advance notice: Look at your lease agreement to check the clause about terminating your lease. Your lease should have information about the notification you need to give before a move-out date. Thirty days before ending a lease is common, but check your specific agreement to make sure. Give your notice in writing, and don’t rely only on a spoken agreement. If you don’t deliver your notice in the time frame set in your rental agreement, this oversight could cost you one month’s rent.
- Separate your rent from the security deposit: Many renters mistakenly think the security deposit is their final month’s rent. Unless you agreed to this arrangement previously, you would have to pay your last month’s rent separate from a security deposit.
- Give your new address: Make things simple for your landlord to return your deposit. If you forget to leave a forwarding address, your landlord won’t have a way to give you back your money.
While security deposits are refundable, you need to make sure you’re on top of all payments and keep the apartment or home in good condition. That way, you’ll get the money you paid as a security deposit returned to you when you move into your next place.
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