A security deposit, a cash guarantee from a tenant to a landlord, is intended to protect the landlord if a tenant damages the property or violates terms of the lease or rental agreement. At the close of the lease, landlords are expected to return a security deposit to a departing tenant.
However, complications can arise that hinder your ability to collect the entire deposit. Here are the top four reasons you may lose a security deposit:
1. Unreasonable Damage
If you've lived in your apartment for 10 years, the condition you leave it in will not be identical to when you first moved in. The walls will be slightly worn and discolored, and the carpets will have evidence of wear. Normal wear and tear should not compromise your security deposit, but leaving crayon drawings or holes in the walls, piles of trash or other items behind likely will.
Louisville, Ky. resident Natasha Carmon learned this lesson firsthand. "I lost out on a few deposits for lack of not having someone to help dispose of excess furniture or items I didn't want to take with me," Carmon says.
What to do: Ensure you plan a move as far in advance as possible. Seek assistance from friends to move large items out of the space, or hire movers to remove and dispose of unwanted belongings.
2. Delaying Repairs
If you fail to notify your landlord about a faulty mechanism or damage in your apartment in a timely manner, you may be liable for the cost of the repair. Los Angeles resident Christina Lavingia and her roommates had to absorb costs for extensive damage to their unit's linoleum as a result of a shower that had been leaking for some time."If our leaking shower had been reported immediately the company would have paid," Lavingia says. "Instead we waited months, and then the damage was on us."
What to do: Always put concerns and repair requests in writing and retain a copy. Make sure to report any problems as soon as possible to avoid further damage that could chip away at your deposit.
3. Not Knowing Your Rights
Laws vary from state to state, which is why it's important to learn what protections you're entitled to as a tenant. For example, in California, landlords have 21 days after the move-out date to return a security deposit to tenants. If the deposit isn't returned in full, landlords are required to send the former tenants a written document explaining and itemizing the deductions made, receipts for any repairs done or anticipated, and any remaining balance from the security deposit.
What to do: Before locking yourself in a new lease, do some investigative work to determine whether the security deposit requirement is fair based on local regulations, and learn what your landlord is responsible for covering versus what you need to pay.
4. Tricky Landlords
As straightforward as it might appear, reading the terms and conditions of your lease is crucial to ensuring you aren't getting swindled by an unscrupulous landlord or rental company. However, it's possible your good faith attempt at reading the fine print is a moot effort when a dishonest landlord is involved.
Real estate blogger Marie Youngblood-Krebs moved out of her apartment years ago, and performed her due diligence by having the unit professionally cleaned for $150. Despite leaving the apartment in good condition, she says hundreds of dollars were withheld from her security deposit.
"Our security deposit had $400 missing," Youngblood-Krebs says. "When I called to inquire, they agreed there were no problems, they stated it was standard deductions for cleaning and repairs – charged whether they actually need to clean or repair."
She continues, "I know this was not disclosed up front, or I never would have signed a lease with them."
What to do: At the time, Youngblood-Krebs didn't think $400 was worth hiring an attorney to fight the case. However, if you rely on the full amount of your security deposit to transition smoothly into your new place, you can opt to contest unusual fees through small claims court.
The bottom line: Keeping diligent records from the time you sign a lease to the time you move out can prevent complications when you come seeking your security deposit.
Jennifer Calonia writes for GoBankingRates.com, a source for CD rates, savings account rates, personal finance news and more.