Security Deposit

Business, Legal & Accounting Glossary

Definition: Security Deposit


Quick Summary of Security Deposit


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.



What is the dictionary definition of Security Deposit?

Dictionary Definition


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.


Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/security-deposit/
Modern Language Association (MLA):
Security Deposit. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. October 26, 2020 https://payrollheaven.com/define/security-deposit/.
Chicago Manual of Style (CMS):
Security Deposit. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/security-deposit/ (accessed: October 26, 2020).
American Psychological Association (APA):
Security Deposit. PayrollHeaven.com. Retrieved October 26, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/security-deposit/

Definition Sources


Definitions for Security Deposit are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 30th April, 2020 | 1 Views.