Why Should You Ask for a Security Deposit?
Most landlords charge their tenants a security deposit to protect themselves against any potential damages the tenant may cause. A security deposit may be called some other names, such as last month’s rent, pet deposit, key fee, or cleaning fee. Regardless of the name, the law treats all collected funds covering unpaid rent and damages as part of the security deposit. The only upfront payment other than first month’s rent that is not part of the deposit is the application fee.
Collecting a security deposit is a smart move for landlords. When you sign a lease with a tenant, you are trusting them to take care of your property. Unfortunately, not all tenants are careful, and some may end up causing hundreds or thousands of dollars in damages. Having a deposit ensures you aren’t covering these expenses out of pocket.
When collecting the security deposit, you need to determine the amount of the security deposit to collect, the holding criteria (whether or not you pay the deposit interest), and if you need an additional deposit for pets. These requirements vary by state.
- How Much Can You Charge for a Security Deposit?
- How Should You Store the Security Deposits?
- What Are Security Deposits Usually Used For?
- What Is the Process of Returning a Security Deposit to the Tenant?
- What Are Some Common Problems When Returning a Security Deposit?
- What Should You Pay Attention to When Returning a Security Deposit?