Security Deposit Law Varies by State
Each state has specific security deposit laws landlords and tenants must follow, including the reasons you can keep a tenant’s security deposit. However, many states share some common reasons a tenant should not expect their security deposit to be returned. These reasons include breaking leases (such as by moving out early or not paying rent), extensive property damage, and cleaning costs.
Breaking or Terminating a Lease Early
If a tenant breaks their lease, the landlord can keep all or part of the security deposit necessary to cover the costs associated with this breach. Again it will depend on the wording of your lease and the particular landlord-tenant laws in your state. If you have included an early termination clause in the lease the tenant signed, they will have to abide by these terms. An early termination clause could read something like this, for example: You may also be able to charge the tenant the court costs or attorney fees necessary if you have taken legal action against them.
Nonpayment of Rent
Most states will allow you to keep all or a portion of the security deposit when the tenant does not pay their rent. When a tenant does not fulfill their contractual obligation to pay their monthly rent, you are usually allowed to keep the portion of this security deposit necessary to cover the lost rent.
Damage to the Property
Another reason you may be able to keep a tenant’s security deposit is because they have caused damage to your property. Damage is different than normal wear and tear on the property. Here are some examples of each: Normal Wear and Tear:
A few small nail holes in the walls from hanging picturesA few small stains on the carpetA small amount of mildew forming in grout lines in the shower tilesDirty groutTarnish on bathroom fixturesLoose handles or doors on kitchen or bathroom cabinetsReasonable amounts of dirt, dust, or grime on the floors, walls, or appliances
Damage:
Multiple/large holes in the wallsHuge stains or holes in the carpetExtensive water damage to hardwood floorsMissing outlet coversMissing or damaged smoke or carbon monoxide detectorsCracked kitchen or bathroom countertopBroken bathroom vanityBroken windowsBroken doorsKeys not returned at end of tenancy
Cleaning Costs
Under normal circumstances, you cannot make deductions from a tenant’s security deposit to cover normal cleaning costs. For example, if a tenant leaves one bag of garbage in the apartment, it is unreasonable to try and charge the tenant a portion of their security deposit to cover your labor. However, if the tenant has left trash all over the apartment, food in the refrigerator, and numerous personal belongings throughout the property, then yes, you may be able to keep a portion of the security deposit to cover your expenses, as the tenant has not left the property broom-swept clean. Another example would be if a tenant had an animal that used the carpet as a toilet. You would be able to charge the tenant for the cost of cleaning or, if necessary, of replacing the carpet.
Unpaid Utilities
A tenant may not be entitled to the return of their deposit if they have not paid their utility bills. You may be able to keep a tenant’s security deposit to cover any utilities they have neglected to pay and were required to pay as part of their lease.
The Bottom Line
Remember, state laws will dictate when exactly a landlord can withhold security deposits from their tenants. If you aren’t sure whether or not you would be within your rights to keep the deposit, check with local authorities. A good real estate attorney should know the particulars for your area.
