Security Deposit Laws

Security deposit laws regulate the amount, holding, and return of security deposits paid by tenants to landlords. These laws vary by state but typically limit the amount of security deposit that landlords can charge (e.g., one or two months’ rent), require landlords to hold the deposit in a separate interest-bearing account, and specify the procedures and timelines for returning the deposit to the tenant at the end of the tenancy. Landlords can typically deduct from the security deposit for unpaid rent, damages beyond normal wear and tear, and cleaning costs, but must provide the tenant with an itemized statement of deductions and any remaining balance within a certain period (e.g., 30 days) after the tenant moves out. Some states also require landlords to pay interest on the security deposit or provide a written notice of the tenant’s rights and obligations regarding the deposit.