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Tenant Guide to Understanding Rental Security Deposits and Deductions

Rental security deposits are important for owning and managing a rental business. If you are a first-time renter and don’t have experience with security deposits, you may not understand why they are necessary and how they work. Some renters assume that they are entitled to their full security deposit when they move out. However, in this blog post, you’ll find that that’s not always the case. Keep reading to learn how rental security deposits work and best practices for getting your full deposit back after you move out.

Why Are Rental Security Deposits Necessary?

Rental security deposits are necessary to include in a lease agreement for many reasons. A security deposit is a set amount of money that a tenant pays before moving into a rental property. This money is held by the landlord throughout the course of the tenancy and is either returned to the occupant or withheld for damages or unpaid bills. 

Before you sign a rental agreement, it’s important to read through the entire document. Within the lease, you’ll find your security deposit amount and expectations for property maintenance throughout your tenancy. If you don’t hold up to your part of the lease, there’s a chance you won’t receive your security deposit in full. 

Are You Entitled to Your Full Deposit After You Move Out?

Some tenants expect to get their full security deposit back after moving out of a rental. However, you are not always entitled to this money. Depending on how well you take care of the property during your occupancy, you may only receive part of your deposit or none of it at all. 

While every state is slightly different, most landlords can deduct your security deposit for damages, unpaid rent, and breaking the lease early. Next, let’s dive into some of the common reasons for security deposit deductions. 

Tenant Guide to Understanding Rental Security Deposits and Deductions

Common Reasons for Security Deposit Deductions

The purpose of rental security deposits is exactly how it sounds—security for landlords if something detrimental happens to the property. Unfortunately, when something does happen, landlords have the right to deduct some or all of the deposit. Here are some of the most common reasons for security deposit deductions that tenants should avoid. 

  • Nonpayment of Rent
  • Breaking the Lease Early
  • Unpaid Utility Bills
  • Major Damages to the Property
  • Significant Cleaning Costs

Nonpayment of Rent

You never want to go without paying your rent, even if you are moving out. That said, your security deposit does not count as your last month’s rent. Instead, you are still expected to pay the last month. Then you have the opportunity to get some or all of your deposit back. If you decide not to pay your rent for any reason, your landlord may have the right to withhold your security deposit.

Breaking the Lease Early

Like if you don’t pay your rent, if you break your lease agreement early, your landlord may withhold some or all of your security deposit. Again, it differs state by state, but all tenants need to check their lease terms to determine the penalties for breaking the lease early. 

Unpaid Utility Bills

Depending on your landlord, some tenants are responsible for paying utilities in a rental home. That said, if you neglect to pay the utilities for your unit, your landlord may have the right to withhold some of your deposit to cover the costs. In some rental properties, landlords are responsible for utility costs. Make sure to read your lease thoroughly before you move in or move out to make sure you’re not missing any important details. 

Major Damages to the Property

If you leave the property with major damages, you can expect to have some or all of your security deposit withheld. In fact, this is one of the main reasons tenants don’t get their full rental security deposits back. That said, tenant damage and normal wear and tear are two different things. Here’s a brief list to show the differences between the two.

Tenant Guide to Understanding Rental Security Deposits and Deductions

Tenant Damages

  • Broken windows, doors, and light fixtures
  • Large stains or tears in the carpet
  • Excessive scratches in hardwood flooring
  • Large holes in the walls or chips in the paint
  • Cracked countertops or broken cabinets

Normal Wear and Tear

  • Minor scratches in countertops
  • Small scratches on the floors or minor stains on carpets
  • Loose door handles or kitchen cabinet knobs
  • Small holes in the walls from hanging pictures
  • Dirty grout in the bathroom or shower

Significant Cleaning Costs

If your landlord needs to spend extra time and money to clean the rental unit after you move out, they may withhold some of your security deposit. Of course, all landlords should have a professional cleaning service come by after each tenancy. But, if they have to put in extra work to clean, you can expect to have some of your deposit withheld. For example, if you leave garbage or unwanted items in the unit for your landlord to take care of or you have a pet that causes an excessive mess. 

Best Ways to Get Rental Security Deposits Back

Most tenants strive to get their rental security deposits back after their lease term. After all, it’s money that you paid originally and have the chance to get back. That said, there are many things you can do to ensure you get all or most of your deposit back. Here are a few tips to keep in mind as a tenant.

  • Take Proper Care of Your Rental
  • Give Adequate Move-Out Notice
  • Clean Before You Move

Take Proper Care of Your Rental

The easiest thing you can do to get your deposit back is to care for the rental unit. After all, it’s not yours, so you should treat it as such. Additionally, before you move in, look over the lease agreement to know what you can and can’t do within the rental. For example, if you want to paint the walls a different color, look in the lease or talk to your landlord before doing so. 

Similarly, make sure you keep up with regular maintenance and necessary repairs within the rental. If damages or issues go unnoticed for too long, they can quickly become irreparable, costing you your security deposit. 

Tenant Guide to Understanding Rental Security Deposits and Deductions

Give Adequate Move-Out Notice

Most lease agreements state that you need to give at least 30 days’ notice before you plan to move out on the rental. Sometimes, it requires a 90-day notice. So, if you’re planning on moving to a new town or finding a new place to live, give your landlord proper notice. If you move out suddenly without giving proper notice, you could be sacrificing your security deposit. 

Once you notify your landlord that you’ll be leaving the rental, they can help you start the move-out process. Typically, this includes an extensive move-out checklist and inspection so you can note any damages, and they can start looking for new tenants right away. 

Clean Before You Move

Before you move out of your rental, you must make sure it is cleaned to the best of your ability. Leaving your unit dirty or disheveled is a sure-fire way to have all or some of your deposit withheld. Once you’ve moved all of your belongings out, it’s crucial to take some time to clean the unit further. For example, clean any marks off the walls, vacuum, mop floors, and clean the kitchen and bathroom.

Security Deposit Laws

Tenant Guide to Understanding Rental Security Deposits and Deductions

Landlord-tenant laws differ a bit in each state. For example, in Pennsylvania (and many other states), your landlord must give you an itemized list of deductions if they withhold any part of your security deposit. However, if they fail to do so within 30 days, you may be entitled to the full deposit, no matter what damages were left in the unit. 

Similarly, security deposit amounts also differ state by state. For example, during your first year living in a rental in Pennsylvania, your landlord may not charge more than two months’ rent for a security deposit. Then, if you’ve lived in the unit for over a year, they cannot charge more than one months’ rent for a deposit. 

Additionally, your landlord can raise your security deposit under certain conditions if your rent goes up in a rental property. However, if you’ve lived in the unit for over five years, your landlord cannot raise your security deposit amount, even if your rent is raised. 

Managing Rental Property

The stressors of owning and renting properties are a lot to manage for busy landlords. Determining fair rental security deposits, monthly rent amounts, and accounting for damages in your rental can quickly become overwhelming. So, if you find yourself struggling with the day-to-day tasks of property management, consider hiring professional help.

Bay Property Management Group is qualified and eager to help manage any of your rental properties. Whether you own one or 100, we’ve got all the daily, monthly, and annual tasks covered. 

We offer a wide range of property management services, including tenant screening, rent collection, move-in, and move-out reports, eviction services, and more. Contact us today to learn more about our rental property management services in Philadelphia, Baltimore, Northern Virginia, and Washington D.C.