5 Reasons Why Landlords Don’t Return Tenant’s Security Deposits

Tenants typically pay a security deposit and their first month’s rent when they lease an apartment. Landlords generally return the security deposit to their tenant at the end of the lease as long as the tenant follows the lease agreement terms. State laws differ, but most states mandate that landlords return security deposits within 15 to 30 days of the tenant moving out.

But there are instances in which landlords withhold a portion of, if not the entire, security deposit. Landlords should learn how to manage security deposits before entering into lease agreements with tenants. Here are a few of the top rules landlords should know beforehand.

Why Landlords Don’t Return Tenant’s Security Deposits

1) Breaking a Lease
2) Property Damage
3) Unpaid Rent
4) Unpaid Utility Bills
5) Any Missing Items from the House

1) Breaking a Lease

A security deposit benefits both the tenant and the landlord, as it helps ensure the landlord has a guaranteed tenant for the specified lease term. If a tenant changes his or her mind about remaining in the apartment until the end of the lease, he or she has no right to ask for a security deposit.

Even if the tenant requests it, a landlord can legally deny them a refund since the lease was broken. If the tenant informed the landlord that he or she would be vacating the apartment within the notice period documented in the lease agreement. The tenant is entitled to a security deposit refund.

2) Property Damage

Besides cash flow, landlords are concerned about their rental properties. Buying a home is a big investment, so naturally, owners will have an emotional tie to their home. With that in mind, no landlord wants their property damaged. So, if tenants make significant damage to the property, they have to pay for it. The landlord is entitled to deduct it from the security deposit.

The best strategy to deal with property damage is to have the property inspected before a tenant signs a lease. It’s also a good idea to take pictures of the property before anyone moves in to memorialize the property’s condition. That way a tenant cannot claim that the damage existed before they moved in.

3) Unpaid Rent

Unpaid rent remains the primary concern of most landlords. Some landlords are heavily dependent on monthly rent payments to fund their everyday lives. So much so that any missed payment would significantly impact their way of life. So, landlords often add this clause to rental agreements as a way of guaranteeing that their financial well-being is secure if the tenant has a change of heart.

This does not mean that tenants can opt out of making rent payments.  Also, landlords can only deduct from a tenant’s security deposit amount in emergencies. Landlords should remember that evicting tenants can be an exhaustive process that consumes time and energy.

4) Unpaid Utility Bills

A landlord has the right not to refund a security deposit or deduct it from it. If the tenant does not pay any of the utility bills before they move out. Utility bills are and will always be the tenants’ responsibility, even though sometimes landlords do include some utilities like Wi-Fi in the rent.

5) Any Missing Items from the House

If anything goes missing from the house, landlords have the right to withhold the tenant’s security deposit. Landlords should take an inventory of the items in the house before a tenant moves in and then again after the tenant vacates the property.

Common Mistake Tenants Make

The most common mistake that tenants make is signing a lease without thoroughly reading it. This is usually because the tenant is excited about moving into a new place. Don’t be in a hurry–take your time and read through the lease agreement carefully.  In addition, do your best to maintain the property as it was when you moved in, this will increase the likelihood that you’ll get your security deposit refunded in full.

Final Thoughts

Although the exact time period may differ, landlords typically 15 to 30 days to return a tenant’s security deposit after the property is vacated. If landlords realize there will be something that requires a deduction from the security deposit. They should inform the tenants ahead of time and give the tenant a chance to explain or state the reason for the damage.

Security deposits can never be non-refundable, but there are justifiable, legal reasons for deducting from the security deposit amount.  If landlords fail to refund the security deposit without a valid reason, he or she runs the risk of violating the law.

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