Here are a few pieces of information to help you understand what a security deposit is, and how it works when renting a new apartment.
What is an Apartment Security Deposit?
A security deposit is a sum of money that a tenant pays a landlord before moving into a rental property. The amount is usually based on the monthly rent amount. The amount is often equivalent to one or two months of rent. This may also be based partially on your credit score.
Reasons Landlords Collect Security Deposits:
Some landlords collect security deposits, others do not. That said, landlords may be considering the following reasons when collecting a security deposit.
- Financial Protection: As a safeguard for damages that may occur or for rent that may not be paid, a security deposit is often required.
- Property Protection: People who place a security deposit have more skin in the game. If a tenant wants their full security deposit back at the end of a lease, they will be more likely to treat the property with care to avoid damages.
HOT TIP: Most landlords also require a pet deposit if you plan to move an animal into the property.
What does a landlord do with a security deposit?
Usually, it’s held as a guarantee in a bank account. In most circumstances, a landlord must keep security deposits in a bank account that remains separate from their business bank account. In some states, if a security deposit is gaining interest, the tenant is entitled to those earnings when the security deposit is returned. In some states, the landlord retains the interest earnings.
Why would my landlord deduct money from my security deposit?
Remember that a security deposit is a protective measure. If something is damaged or needs to be replaced upon your departure, the landlord can legally deduct reasonable fees from your security deposit. Also, if you have any late fees or unpaid rent, your security deposit could be reduced. Consider this: your landlord handles replacing things in the apartment that wear out over time, but if a tenant damages something on the property, it is the tenant’s responsibility to replace it.
How long will it take to get my security deposit back?
Again, this varies by state and by lease. Most states require the landlord to return your security deposit within 30 days of you vacating the premises. Check your lease for the timeframe.
Remember, a security deposit is usually required to protect your landlord’s money and property. If you maintain the terms of your lease and do not leave any damages, you should be able to get your deposit back. Security deposits are just a necessary evil in rental markets. Be informed before giving any landlord a security deposit.
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