Security If you’re about to rent an apartment for the first time, you may be wondering what a security deposit is and why you need to pay for it. It is important for every tenant to know this essential part of renting any apartment or property. Find out what a security deposit is and how it works.

Security

What Is a Security Deposit?

A security deposit is a sum of money that a new tenant provides the owner of their new residence before moving into the home and paying rent. Whether you are renting your new place from an individual landlord or a property management company, the majority of property owners will expect some form of security deposit from a new resident. The amount of a security deposit can vary depending on the terms of your rental agreement.

How Does a Security Deposit Work?

Security deposits are collected when you sign the rental agreement. It may seem odd that a landlord would collect money from you before you even move in, but the security deposit serves an important purpose for the landlord. Landlords keep the money from the security deposit on standby throughout the duration of your stay. Many states actually require landlords to prove that the money is in a separate account where it can’t be spent.

Landlords only use the security deposit money if you violate your rental contract in some way. Typically, this would involve damages to the apartment; for example, you put a hole in the wall or break a window. The landlord may also use your deposit if you skip out on rent. Sometimes landlords will also use the security deposit to pay for cleaning fees if you leave the apartment a mess when you move out.

If you don’t break your contract, the security deposit should be refunded to you at the end of your stay. Some landlords may refund only part of the deposit if you leave the apartment a mess or inflict minor damages to the property.

Read More- Ten Life Lessons I’ve Learned From My Horse

How Much Is a Security Deposit?

The top thing that influences the amount of your security deposit is the price of your monthly rent. Most security deposits are equal to about one month’s rent. However, security deposit costs can vary. It could be influenced by a few other factors:

  • State law: Aside from the monthly rental price, one of the top influencing factors for security deposit cost is state law. Some states place pricing caps on their security deposits, though the level of the cap varies per state. As a tenant, be sure to understand your individual state laws.
  • Amenities: The rental’s amenities can also influence security deposit prices. Some apartment buildings that offer a robust suite of amenities may charge significantly more for their security deposit. Some of these amenities might include a concierge, private parking, or in-unit laundry. Landlords may charge a premium for newer builds or recently renovated properties.
  • The local market: Unfortunately, many security deposit costs are influenced by the price that other landlords in the area charge. If you are searching for a place in a high-demand market, security deposits may be higher than average.

Are Security Deposits Returned?

Security deposits will only be returned if you abide by your rental contract. If you want to increase your chances of getting your security deposit back, be a model tenant.

  • Avoid inflicting any damage to your apartment. If you do minor damage to the apartment, like holes in the walls from photos, consider fixing them.
  • Pay your rent on time every month.
  • Clean up after yourself when you move out.

If you believe that you will get your security deposit back, you may not know when to expect it. Unfortunately, the timeline on the return can vary. Part of this depends on the state you live in and its regulations around security deposits. However, it typically falls anywhere between two weeks to two months after your move.

What If My Landlord Doesn’t Return My Deposit?

If you are confident that you deserve to have your security deposit returned, but have yet to receive it, you may want to consider writing a demand letter to your landlord. This letter is a formal request for the security deposit to be returned. Typically, the letter will detail a history of your stay at the rental property and make an argument of why you deserve to get your money back. While it often doesn’t come to this, you may need to file a lawsuit in small claims court to get your money back. Often, this isn’t worth the process unless your security deposit is a substantial amount of money.

Introducing TheStreet Courses: Financial titans Jim Cramer and Robert Powell are bringing their market savvy and investing strategies to you. Learn how to create tax-efficient income, avoid mistakes, reduce risk and more. With our courses, you will have the tools and knowledge needed to achieve your financial goals.

Recommended Articles