What Are Some Common Problems When Returning a Security Deposit?

  • When is the deposit refundable? The deadline depends on your State laws. When a tenant moves out, you’ll usually have a period of time (14 to 30 days in most states) to either return the tenant’s entire deposit or provide an itemized statement of deductions and refund any deposit balance.

  • What types of deductions can you impose? You can generally withhold all or part of the deposit to cover unpaid rent, damage to the rental property and cleaning costs (outside of "ordinary wear and tear"), or other tenant financial obligations (such as payment of utilities).

  • Should deposit deductions be itemized when the tenant moves out? Some states set specific rules and procedures for move-out inspections and have prepared detailed lists of deposit deductions for tenants. Regardless, it’s always a good idea to itemize deductions so you don’t open up the door to a tenant dispute.