Business, Legal & Accounting Glossary
A payment required by a landlord to ensure that a tenant pays rent on time and keeps the rental unit in good condition. If the tenant damages the property or leaves owing rent, the landlord can use the security deposit to cover what the tenant owes.
n. a payment required by a landlord from a tenant to cover the expenses of any repairs of damages to the premises greater than normal “wear and tear.”
The security deposit must be returned within a short time (varying by states) after the tenant vacates, less the cost of repairing any unusual damage. Unfortunately for tenants, these damages are usually subject to the judgment of the landlord, who may desire to paint and refinish on the tenant’s money, which results in many small claims suits. In a few states the security deposit must be kept in a separate bank account, and some states require payment of interest on the amount held as a deposit. A security deposit is sometimes confused with a deposit of the “last month’s rent,” which may be credited to the tenant for the final month’s rent. A security deposit cannot be used legally as a rent credit.
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This glossary post was last updated: 30th April, 2020 | 1 Views.