What Can a Landlord Deduct From a Security Deposit?

When a tenant moves out, they hope to get their entire security deposit back, especially if they followed all the landlord's requirements as outlined in the lease agreement. Occasionally, this doesn't occur, and the landlord takes money out of the security deposit to pay for repairs.

Landlords require tenants to pay a security deposit before moving in to encourage them to pay their rent and follow the terms of the lease. The security deposit also ensures that the landlord can fix any significant damage caused by a tenant without losing income.

On the other hand, some landlords use the chance to keep your money to their advantage by refusing to return your security deposit for no good reason. Tenant-landlord law prohibits this practice, and you can file a small claims court lawsuit to get your money back.

Tenant-landlord law allows the landlord to deduct the cost of repairs from the security deposit if a tenant significantly damages the property. Different state laws make a distinction between this damage and normal wear and tear, shielding the tenant from liability for damages resulting from the latter.

Here is an overview of what you can deduct from a security deposit as a landlord.

What Can a Landlord Deduct from the Security Deposit?

When a new tenant moves into an apartment, it will be in good shape because the landlord has cleaned and fixed it up. Additionally, they might have repaired any damage the prior tenant left behind and taken that amount out of the security deposit. 

If a landlord runs into the following problems, they are legally permitted to take money out of a tenant's security deposit.

1. Breaking the lease

If a tenant broke their lease, they would be subject to this penalty, which could include losing their security deposit if they vacated early. Although these tenant rights may differ from state to state, if it was stipulated in the lease agreement, you might not be entitled to your security deposit's return, even if you give a 30- to 60-day notice.

The right of a landlord to deduct money from a tenant's security deposit for breach of contract is protected by tenant-landlord laws. You can discuss potential solutions with your tenant, like subletting the apartment for the remaining term of the lease.

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Related Reading: The Landlord-Tenant Checklist

2. Significant property damage

The majority of lease agreements specify that it is the tenant's duty to maintain the rental space and return it to it in the same condition that they found it. The landlord shouldn't charge tenants for any wear and tear-related minor changes that are to be expected. Extreme damage will result in taking money out of your security deposit. Examples include:

• Broken windows, cabinets, and doors
• Severe rips in the carpet and the curtains
• Smoke detectors not working
• Appliance damage brought on by carelessness
• Accumulations of dirt, mold, or stains
  

A landlord can take a significant amount of the security deposit to cover the cost of repairs if the tenant vacates the property with these damages. In order to safeguard the security deposit and prevent being overcharged, tenants can choose to fix the damage before moving out.

How to identify damage caused by tenants

The use of a Rental Inspection Report is the quickest and most trustworthy method of tracking damage. You can use this report to record the state of a rental home both before and after the tenant vacates. Rental Inspection Reports ensure the following in addition to being occasionally legally required:

• Landlords can track damage brought on by tenants
• Tenants are not held liable for harm caused by an earlier tenant
  

In most states when a landlord uses money from a security deposit, they must provide an itemized receipt showing how the money was used and any remaining money (if any). If the tenant disputes the deductions made for repairs of damage caused by the tenant, the landlord may point them to the inspection report.

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3. Unpaid rent or utilities

In the event that a tenant vacates the property with unpaid rent and utility bills, the landlord may be entitled to keep the security deposit. However, according to tenant-landlord law in most states, the tenant is not allowed to use the security deposit to pay the rent.

In essence, tenants cannot inform their landlord that they will not pay the rent; instead, they should take that amount out of the security deposit. Rent must be paid every month until the agreement is over. In most states, the security deposit must be returned by the landlord 10 to 21 days after the tenant vacates the property.

4. Messy and dirty property

A well-written lease agreement outlines exactly how a tenant is to vacate the apartment. Some leases stipulate that tenants must tidy up after themselves and remove all trash. The landlord may be able to deduct the cost of cleaning from your security deposit if the tenant vacates the apartment and leaves it in a terrible state.

One of the most common deductions is actually for cleaning costs. To ensure a fair process, it's a good idea to take photos of the rental space before and after a tenant moves out to have a clear record of the condition of the property. Additionally, providing tenants with a detailed cleaning checklist before they move out, along with an estimate of the costs for professional cleaning services, can help prevent disputes over cleaning fees.

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Related Reading: Can a Landlord Tell a Tenant How Clean to Keep a Property?

5. Large Objects Left Behind

Some tenants leave their large, unnecessary items for the landlord to dispose of on purpose rather than moving them with them. These items can be costly for a landlord to dispose of, and as such, the cost of moving them may be deducted from a tenant's security deposit. To avoid these additional fees, tenants should consider hiring a junk removal service or donating any unwanted items to a charity that accepts donations at no cost.

What Can’t a Landlord Deduct from the Security Deposit?

As a landlord, it's important to understand the difference between normal wear and tear and damages caused by a tenant's neglect or misuse. Normal wear and tear, such as minor scuffs on walls or slight fading of carpet, are expected and are the responsibility of the landlord to repair. However, damages caused by neglect or misuse, such as large holes in walls or stains on the carpet, may be deducted from a tenant's security deposit.

Some examples of things that can’t be deducted from the security deposit include:

• Paint, wallpaper, and drapes that have faded
• Smoke detector battery replacement
• Small nail holes
• Changes in temperature that cause warped doors
• Furniture scuffs on the carpet 
• Broken appliances not from misuse
• Clogged drains and sinks that occurred because of old pipes
  

Can a landlord demand that a tenant cover the cost of painting?

For routine maintenance, a landlord typically needs to repaint a rental property every few years. They may be unable to deduct painting expenses from a security deposit in that situation. Only in cases where a tenant has painted over the original color or damaged the walls may a landlord use a security deposit to cover painting expenses.

Prior to painting a rental property, tenants should always review their Lease Agreement. They should ask their landlords if their lease doesn't specifically state whether they can paint. Following the terms of the lease is the best way to get your security deposit back when the lease is up.

Many landlords allow tenants to paint as long as they promise to repaint the walls before leaving. In that case, so long as they carry out the required painting, a tenant's security deposit is secure. If they don't, their landlord might be able to have the walls painted using the security deposit.

A few landlords forbid tenants from painting. This condition is particularly valid if a rental property has been professionally painted.

The landlord may deduct the cost of filling and repainting walls after a tenant has made an excessive number of holes in them from the security deposit.

Bottom line

The general rule is that tenants should receive their entire security deposit back as long as they have paid their rent on time and left the property in the same condition as when they moved in or as close as possible.

Conducting a thorough walk-through as soon as you move in is the best way to ensure fairness and accuracy. Additionally, it's best practice to document everything with photos. This demonstrates who is in charge of paying for the repairs and causing the damages.