What are the Landlord Security Deposit Laws
Explanation of Security Deposits
Security deposits are very common when the rental or lease agreement is one year or more. Short term leases which last for a few months or a month to month rental agreement typically do not require security deposits. The law also makes exception to hospitality accommodation, dorms and other types of rentals such as vacation rentals and the likes as these are not covered by the landlord security deposit laws. The law states that any tenant entering into an agreement for a period of one year or more should provide a security deposit. The amount of the security deposit may vary but it is usually a fixed amount regardless of the rent amount or it is a portion of the yearly rent amount.
Security deposit is taken by a landlord to provide a financial cover should the tenant fail to pay his or her rents and if there is any damage to the property due to the tenant’s fault and the tenant fails to get the damages repaired or fixed.
Failure to Pay Rent
If a tenant fails to pay the rent amount then the landlord can either deduct the rent from the security deposit or furnish a notice of eviction. If a notice of eviction is served and the tenant decides to leave then the landlord can deduct all the rental dues from the security deposit before refunding the remaining amount. However, it must be noted here that before refunding the security deposit, the landlord would have to check the property for damages and if there has been any major depreciation apart from what is normal. If there are damages or any abnormal depreciation then the landlord can deduct the cost of maintenance and repair from the security deposit and then refund the remaining amount.
Security deposit is not refunded if there is considerable damage, if the tenant is absconding or hasn’t made substantial rental payments. If there is a legal dispute between the tenant and the landlord leading to the landlord winning the case, to settle the payments or to take care of the legal expenses, a landlord can deduct money from the security deposit and refund the rest if there is any left. If the security deposit doesn’t compensate for all the expenses then the tenant is required by law to make payments towards the same.
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