Security deposits are funds collected by landlords from tenants to cover potential damages to the property or unpaid rent. The handling of security deposits is governed by state and local laws, which dictate how they must be collected, held, and returned.
Landlords must usually provide tenants with a written receipt for the deposit, including details about the amount and the conditions under which it may be withheld. Additionally, many jurisdictions require landlords to keep security deposits in a separate, interest-bearing account and provide tenants with information about the account.
When a lease ends, landlords are typically required to return the security deposit within a specific time frame, which varies by state but is often between 14 to 60 days. If deductions are made for damages or unpaid rent, landlords must provide a detailed, itemized list of these deductions along with any remaining deposit funds.
Failure to comply with these regulations can result in penalties, including the potential for tenants to recover double or triple the amount of the deposit, along with legal fees.
