What Is A Security Deposit Used For
Many have often wondered what is a security deposit used for and why they have to pay it?
If you’ve gone around looking for rental properties, you have undoubtedly come across some rent-related jargon that might confuse you.
Administrative fees, maintenance fees, and several other deductions are involved in a rent agreement – however, one term seems to confuse people more than the others: security deposit.
Before signing the lease agreement, make sure you understand how a security deposit works in your particular situation, what the amount is, what is covered under this amount, and when it can be paid back to you.
What Is A Security Deposit And Why Do Landlords Require Security Deposits?
A security deposit is a form of insurance given by the tenant to the landlord – it guarantees that rental payments will be on time and the lease agreement will be followed to the exact specifications.
The best part is that security deposits are refundable, so at the end of the rental agreement, tenants are returned a portion of the full amount of the security deposit – depending on your agreement.
Usually, the tenant provides the landlord with a security deposit check, and the landlord holds on to it until the end of the tenancy agreement.
If the property is damaged in any way during the renter’s stay, the landlord uses the security deposit to pay for the maintenance costs.
How Is Security Deposit Calculated?
Various considerations go into calculating the amount for security deposits in a particular locale. Some of these are:
- Your local laws that can differ from State to State
- The amount of rent paid each month
- The type of unit and facilities available
- The rent charged by other landlords on similar properties
- Credit score and any priors the renters may have to their name
When Is Security Deposit Due?
Typically, landlords expect the deposit soon after the rental agreement is signed as the tenant receives the keys to the property – landlords may ask for the first rent payment in advance as well.
Rarely a landlord might facilitate the tenants and let them make a partial payment for the security deposit – allowing them to move in quickly. In such cases, the remaining amount is due with the rental fee over the next month or two.
How is Security Deposit Refunded?
A security deposit refund is due once the property has been vacated.
But first, landlords thoroughly examine the rented property. If all seems in place, they return the security deposit without any deductions.
However, if there is any damage to the property caused by the tenant, the security deposit will be used to pay for the maintenance, and the remaining amount is returned to the renter.
Renters can make sure that they get their full deposit back by:
- Thoroughly cleaning their apartment before checking out
- Repairing all damages caused during their stay
- Being present when the landlord inspects the apartment
- Returning all the keys that were given when they started the rental period
We hope this clarifies the purpose of a security deposit and why it is essential for landlords to secure their interests.
If a tenant has not received the deposit back within the given time, they should send a reminder to the landlord.
Or better yet, find a suitable rental property where you can count on the landlord to be fair in all dealings.