How to Make Security Deposit Deductions

Before you make any security deposit deductions, learn what are the valid reasons and proper steps for making deductions from security deposit.

Proper Reasons for Security Deposit Deductions

1. Property damages caused by abuse, improper use or negligence

Deductions from security deposit can be made for any damages caused by the tenant, occupants and tenant's guest due to the above reasons. In the absence of a pet deposit, damages, stains and odors caused by pets can be deducted from the security deposit as well.

This excludes any normal wear and tear damage - The landlord cannot fault (and charge) a tenant for deterioration and damages due to day-to-day use or natural aging. The landlord is responsible for all wear and tear damages to the property.

2. Unpaid rent and other rental bills owed by the tenant

While this point is fairly straightforward, we need to emphasize you cannot use the security deposit as the final month's rent.

3. Cleaning expenses to restore rental property to pre-lease conditions

At the end of the lease, if the property requires extensive cleaning (i.e. tenant makes little or no effort to clean up)... or there is serious grime that demands professional cleaning (e.g. major carpet stains or mold-infested bath tub), the landlord can deduct money for the cleaning bills as well.

How to Make Deductions from Security Deposit

To avoid security deposit disputes and adhere to landlord tenant laws, it's important to follow the proper procedure when making deductions.

The Uniform Residential Landlord and Tenant Act requires landlords to give the tenant an itemized list of deductions of security deposit - This means that every deduction has to be listed individually instead of being consolidated into one lump sum.

For property damage deductions, it's wise to keep written records of all related repair bills and photo evidence of the damages. You should send these along with the itemized list of deductions to your tenant.

The deduction and return of security deposit must fall within a specific deadline. This deadline can vary from 14 to 45 days from the end of a lease. If you are renting properties in the United States, Click here to see your state laws for the return of security deposit.

Final point: All security deposit returns should come in the form of an order check payable only to the tenant. An order check leaves you with a dated paper trail (written proof of when you made the refund)... plus if it ever gets lost in the mail, you can just cancel it and re-issue a brand new one.

Security Deposit

• Security Deposit Definition - What is a Security Deposit?
• When to Collect Security Deposit from Tenants
• Security Deposit Receipt Form
  
• How Much Security Deposit Should I Charge?
• When and How to Make Security Deposit Deductions
• Itemized Security Deposit Deduction Form
  
• U.S. Security Deposit Laws - Security Deposit Amount and Interest
• U.S. Security Deposit Laws - Return of Security Deposit