What is a security deposit?

Are you getting ready to rent your first home or apartment? This is an exciting time, but there might be a few confusing things ahead of you throughout the process.

For example, did you know that most landlords will require that you pay a security deposit?

But what is a security deposit anyway? Why do you have to pay for it? What is a security deposit used for when the landlord takes it?

We know how frustrating it can be to have to hand over more money than you had expected. After all, you're already paying rent, right? We're here to explain everything that a new renter needs to know about security deposits so you're prepared when you sign your lease.

Keep reading to learn more!

First: What Is a Security Deposit Anyway?

A security deposit is a sum of money that you have to give a landlord (most of the time) when you sign your lease. It comes in addition to the first month's rent, but it doesn't go toward your rent.

There are rare situations in which you can use a security deposit for rent, but these are unusual.

For example, if someone is having trouble paying rent one month due to losing their income or a medical emergency, the landlord may let them use the security deposit (though they may ask that the tenant repays the full amount when they're able to do so).

Some tenants also prefer for the security deposit to go toward the final month's rent, but this isn't always the best choice for the landlord. If the tenant uses the money for rent and the landlord finds damage after they move out, they have to pay for it on their own.

Your landlord will have you pay the security deposit before you move into your apartment. If you choose not to pay, they won't let you sign the lease.

Why Does the Landlord Require a Security Deposit?

Alright, so you know the "what," but what about the "why?"

Essentially, a "security" deposit is for both you and your landlord. It gives the landlord "security" that you won't damage the apartment or break your lease. In the event that you do, all or some of that security deposit will go towards repairing damage and making sure that the landlord doesn't lose too much money.

The security deposit is also good for you. If you cause damage to your apartment, you don't have to pay for it out of pocket. If you've been in the apartment for long enough, you may not even remember the deposit, so it doesn't feel as much like you're losing money.

While the security deposit might feel like a punishment or a money-grab, it serves a legitimate purpose.

How Much Will the Security Deposit Cost?

This varies depending on the landlord.

Most of the time, the security deposit will cost the same amount as the monthly rent. This is why so many people get confused between the first month's rent and the security deposit.

This isn't always true. Some landlords require higher security deposits. It might be the default or it might be because the tenant is bringing in pets.

Sometimes security deposits vary by area. There may be local legislation in place that sets parameters for appropriate security deposits. You may also be able to negotiate your security deposit with your landlord, though not all landlords will be open to this kind of conversation.

If a tenant has no proof of income, a low credit score, or anything else that may qualify as a "red flag" to the landlord, they may have to pay a higher security deposit if they want the apartment. They are considered risky tenants, so the landlord wants that extra coverage.

Is a Security Deposit Refundable?

In most cases, security deposits are refundable. Part of your contract with your landlord is that, as long as your home is in good condition when you leave, your deposit comes back to you.

In some cases, landlords are resistant to refunding security deposits. They are not allowed to keep your security deposit, though, so you have legal ground to object to this.

We'll talk more later about what you should do if you have a landlord who won't give you your security deposit back even if you've left a perfect space behind.

Consider your security deposit like collateral. You're giving it to the landlord as a symbol of trust. They hold onto it and you do your best to maintain a habitable space.

What Causes You to Lose a Security Deposit?

So why wouldn't you get your security deposit back?

When you live in an apartment, you're responsible for the majority of its upkeep. While your landlord should cover all important maintenance and make sure that your home is a habitable space in the event of damage that's outside of your control, you need to do your part.

There are many things that landlords may consider unreasonable damage. They don't include things that are normal amounts of wear and tear (we'll discuss this in the next section).

Sometimes the damage is the result of the tenant neglecting maintenance. While all landlords should try to have routine maintenance checks with their tenants, many don't bother. This means that the tenant is responsible for calling for maintenance when they need it.

If there's water damage due to a leaky pipe that the tenant didn't fix, or fire damage from something within the tenant's control, these will disqualify them from getting their deposits back.

It's also common for landlords to keep some or all of the security deposit in the event that the tenant has put holes in the walls. Standard holes from hanging paintings or other wall adornments don't often qualify, but large holes will cost the landlord a lot of money to fix.

If the tenant has pets that cause damage, the landlord may keep the security deposit. That said, if they require pet rent, this may also cover the damage depending on the landlord.

If you're unsure as to what constitutes as damage, talk to your landlord before you sign the lease.

What Doesn't Count as Damage?

Not all damage should result in your security deposit being taken away from you. Most tenants don't do enough damage for this to happen.

Normal wear and tear is a part of being a landlord. This means that basic repairs or renovations after a tenant moves out are the landlord's responsibility, not the tenant's.

This includes things like cleaning dirty spaces (most landlords have professional cleaners, though some request a cleaning fee), re-caulking between tiles or gaps, fixing the occasional cabinet hinge, and fixing faulty appliances.

If there are small problems with the unit, the landlord may take a small amount of the security deposit instead of the whole thing. These issues may seem like normal wear and tear, but are actually more expensive.

Remember that living in a home is always going to result in that home degrading in some way. Carpets fade and get dirty, walls get smudges, paint chips.

It's likely that if you don't notice the problem, it's normal wear and tear. Again, always ask the landlord before you move in so you know what you can expect.

What Happens If My Landlord Won't Refund  My Security Deposit?

Sometimes landlords don't want to give your security deposit back, even if you haven't caused any damage to the apartment. This is a frustrating experience as it's their word over yours.

First, try preventative measures. When you move in, take note of the condition of the apartment. Come to the landlord with any problems right away and put it in an email so you can prove that you've communicated your issues.

Take pictures of any problem areas as well.

When you're moving out, walk through the apartment with your landlord. This way, they can point things out to you so you know if your deposit isn't coming back and why.

If you have problems with anything that they point out, this is the perfect time to plead your case.

If your landlord hasn't found any problems with the apartment and they still try to keep your deposit, you have to take action. Make the landlord put in writing why they're keeping the deposit. If you disagree with their thoughts, you're allowed to defend your rights.

Check local laws to see what they say about security deposits in your area.

That's All You Need to Know About Security Deposits

So what is a security deposit? It's a deposit that you give your landlord before you move into your new home. It protects your landlord against having to pay for damage when you leave.

Remember, a security deposit isn't free money for your landlord. You are entitled to your security deposit when you leave the home if it's in good condition.

Are you looking for your next rental home? We want to help you find it. Use our site to find your home today and check out our resources for new renters.

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