Why You Need to Make Sure Your Tenant’s Security Deposit Is Returned on Time
Tenants and landlords have a unique relationship, being dually transactional but friendly. When moving out, there are quite a bit of steps renters and landlords need to follow to ensure a smooth process on both ends.
One of the most widely regarded and important steps taken between a landlord and renter, is the security deposit being paid and received before move-in and giving and reviving the security deposit back after move-out. For landlords, processing and returning the security deposit in a timely manner is imperative for the future relationship with past renters and new-coming renters.
What is a security deposit?
A security deposit is a sum of money that the landlord collects from the tenant as a safeguard against any damages or unpaid rent that may occur during the lease. The security deposit is usually paid by the tenant at the beginning of the lease term and is kept by the landlord until the tenant moves out.
The amount of the security deposit varies and has the intent to protect the landlord and the corresponding property. If the tenant causes damage to the apartment or fails to pay rent, the landlord can use the security deposit to cover the costs of repairing the damage or collecting unpaid rent. The landlord has to return the security deposit to the tenant at the end of the lease term, provided there are no damages or unpaid rent.
Process of returning a security deposit
When it's time for a tenant to move out, there is a list of steps landlords must follow in accordance with property rules so the property is correctly vacated and the security deposit is then returned.
Once the tenant moves out, the landlord will inspect the property and note of any damages past normal wear and tear. Any damages will be noted and documented. The landlord will also confirm all lease obligations, like paying rent, were fulfilled.
2. Itemized damage statement and deposit deduction (if necessary)
If damages exist, the landlord will create an itemized list to send to the tenant. The tenant will receive notification of the damages and the price it will cost to fix said damages. In the case of damages, the security deposit covers the reparation of said damages.
3. Deposit return
After noting and covering the damages, the landlord will return the remainder of the deposit to the renter. The landlord returns the deposit through a physical check, electronic bank transfer, or another agreed-upon method of payment.
The importance of a timely deposit return
There is legality surrounding the timeline with security deposit returns. The legal timeframe for returning a security deposit varies depending on the jurisdiction. In the United States, the timeframe ranges from 14 to 60 days, depending on the state.
It is important for landlords to understand the laws and regulations in their state regarding the timing of returning security deposits. Failure to return the security deposit within the legal timeframe can result in consequences for the landlord, including penalties and fines.
On top of legal rules and regulations, it's of utmost importance to return the deposit in a timely manner to maintain an honest and reliable reputation. Tenants often rely on the security deposit to cover their moving expenses or the deposit for their next rental.
Delaying the return of the security deposit can cause financial difficulties for the tenant, which can lead to negative feedback and legal action against the landlord. Returning the deposit on time creates trust and a level of accountability in the renter community that is invaluable for future relationships with renters.
Maintaining good tenant relations pays off
Returning the security deposit in a timely manner is more than just a legal requirement, it's the right thing to do. The tenant relationship extends beyond the lease period and since returning the security deposit is the last step, so it's important to end things on the right note.
Landlords should take the right steps to ensure they're well-informed and can follow the proper steps for the sake of their reputation and relationships with current and future renters.