Security Deposits

Security deposits are funds that tenants pay to landlords at the beginning of a tenancy to cover potential damages or unpaid rent. State laws regulate the amount, collection, holding, and return of security deposits to ensure that tenants’ funds are properly handled and only used for legitimate purposes. Landlords must typically provide tenants with written notice of their security deposit rights and obligations, place the funds in a separate interest-bearing account, and return the deposit (minus any lawful deductions) within a specified timeframe after the tenant moves out. Tenants should thoroughly document the condition of the rental unit at move-in and move-out to avoid disputes over security deposit deductions.