What Can I Deduct or Withhold From a Security Deposit?

Written on February 24, 2016 by , updated on December 9, 2016

Security Deposit DeductionsThe rules for handling and deducting from a security deposit are commonly misunderstood. This article will clarify the legitimate reasons for withholding all or part of a security deposit from a tenant.

Best Practices for Withholding a Security Deposit

It’s a common scenario: your tenant pays you a security deposit before moving in, which gives you some peace of mind that the money will pay for certain items or damages when the tenant moves out.

When move-out day arrives, the tenant says they left the unit spotless, but the floor wasn’t even swept. Or worse, there are broken windows, an unidentifiable sticky liquid all over the fridge, and a clogged shower.

…only withhold deposit monies for actual damages, material or financial.

The general rule is that a landlord or manager can only withhold deposit monies for actual damages, material or financial. Meaning, you can deduct money if they owe you past due rent and fees, or caused damages beyond normal wear-and-tear.

State laws vary greatly, but there are generally some statues that regulate the basics such as:

  • whether or not you must put the money into an interest-bearing account,
  • if you can or cannot commingle such deposits with your personal or business accounts
  • what you can or can’t deduct from a tenant’s security deposit
  • the timeframe in which you must return the deposit or supply written notice of why you aren’t returning all or part of it.

Things to Remember:

  1. Always fill out an “Inventory/Condition Checklist” before the tenant moves-in so that there is a baseline for comparison. (Download a Move-in/Move-out Checklist)
  2. Provide the tenant with an itemized receipt of any deductions before returning any money. (Download a Free Deposit Receipt Template)
  3. Take plenty of pictures of the damages and overall condition after each move-out.
  4. Follow your state’s rules and timelines for returning the deposit.

Let’s talk about some basic general rules for deducting and withholding deposits.

Related: How to Handle Security Deposits Properly

Breaking the Lease

You can’t automatically keep a deposit just because your tenant abandons the lease or breaks a rule in it. Again, you must have actual damages to offset your claims against the deposit.

If the tenant leaves you high and dry with unpaid rent, utility bills, late fees, and parking fees, then you could withhold some or all of the deposit to cover the debt. A lease is a contract, and if the tenant breaches it, you can take them to court if they don’t pay.

Practically speaking, unless the debt is multiple thousands of dollars, going to court is often more trouble than it’s worth. Even if you receive a judgment, you still have to collect it from the former tenant. Most landlords opt to keep the security deposit and look for a suitable new tenant.

Abandonment and Unpaid Rent

If the tenant abandons the lease and stops paying rent, you almost certainly will have a claim because it takes a few weeks, if not months, to find a replacement tenant. Your previous tenant would still be responsible for rent during that time, and if he/she didn’t pay, then you could withhold the deposit to offset the unpaid rent, and sue them for any remaining balance.

Note: if you keep a month’s worth of rent from the deposit, but don’t actually have a vacancy that is a month-long, then you would need to give back any overlapping funds.

You can’t “double dip” on the rent! Do the right thing!

Since most security deposits cover only one or two month’s rent, it’s important to start eviction proceedings as soon as possible if the tenant makes no attempt to pay.

If you’re not familiar with the eviction process in your area, hiring an attorney is wise. It’s not okay for the tenant to forego paying the final month’s rent under the assumption you’ll apply the security deposit to it – so don’t use the deposit for last month’s rent.

Related: How to Evict a Tenant – The Eviction Process in 8 Easy Steps

Normal Wear and Tear

Every property suffers some normal wear and tear, and you can’t deduct that basic upkeep from the security deposit. If the tenant cleans regularly, then the landlord is always responsible for normal wear and tear.

The general rule of thumb is that a landlord is not allowed to deduct from the tenant’s security deposit for “normal wear and tear”.

Normal wear and tear typically includes the following:

  • General rug wear
  • Sun-faded wallpaper or paint
  • Nail holes in walls from picture hangings
  • Bathroom mirror desilvering
  • Appliances no longer working, but not due to misuse
  • Warped windows or doors, due to temperature or age
  • Dirty draperies or blinds

Texas, as well as other states, define “normal wear and tear” as:

“…deterioration that results from the intended use of a dwelling…but term does not include deterioration that results from negligence, carelessness, accident or abuse of the premises, equipment or personal property by the tenant, by a member of the tenant’s household or by a guest of the tenant.”

Meaning, if a tenant was simply living in the property the way it was intended, and did not damage anything by means of abuse, negligence, accident, guests, animals, or lack of normal cleaning, then a landlord has no right to any deposit deductions. Since HUD doesn’t have an official list of acceptable deductions, landlords have to go by their state rules (if any exist), personal experience, and their gut feeling.

Property Damage

clean-ad

If your tenant or their guests cause excessive damage to the property, you can use the security deposit toward repair or replacement. Some damage is fairly obvious, such as big holes in the wall or floor, or broken fixtures. Other conditions, not so immediately apparent, are also deductible from the security deposit.

These could include but not limited to:

  • Missing smoke or carbon monoxide detectors
  • Flea extermination, if a pet lived on the premises
  • Broken or missing window blinds
  • Appliances broken due to negligence.
  • Dirt and filth as a result of in adequate clean
  • Any damages caused by lack of common sense or improper use (like sliding down a stair handrail)

Even if you find some excessive damage after the deposit was returned, you can still send an invoice to the tenant. However, the chances of receiving that money is slim to none.

Cleaning

clean-up

If you have to pick up and dispose of a few minor items after the tenant is gone, that’s not grounds to withhold part of the security deposit. And quite honestly, it’s just not worth the effort to deduct money for a few items. However, if the tenant left junk and trash all over the place, or food rotting in the fridge, that’s a different story.

Many leases specify that a tenant should leave the property in “broom clean condition,” or terms to that effect.

I’ve never really liked this term because a tenant could potentially sweep the apartment, but leave the stove, fridge, and closets a complete mess. Without more specific language in the lease, you’ll eventually regret using the term “broom clean”.

Related: How to Get Your Tenants to Clean Regularly in 5 Easy Steps

Painting

Many landlords repaint the interior of the rental property to attract a new tenant. It’s routine and usually performed every few years, so you can’t deduct the costs of hiring a painter or purchasing paint from the security deposit.

However, if the tenant painted the walls some hideous shade or drew “art” on them, the cost of repainting is deductible – but only for the affected rooms. The same holds true if the repainting is necessary because the tenant or guests smoked in the dwelling, causing staining on the walls.

Likewise, if the tenant painted without your permission (lease clause required), you would be able to deduct the cost of a painter and supplies to return the wall to its original color compared to when they moved in. Although, if the paint color is neutral and nicely executed, then you might want to consider thanking your tenant for painting!

Related: Tip #4: Paint Walls a Neutral Color

Provide Receipts

Make sure to document all the necessary repair work to prove your expenses. In most states, such documentation is required above a fairly nominal monetary amount ($126 in California).

If you deducted money and the funds are unsubstantiated, the tenant may take you to small claims court. Many times, the tenant can be awarded 2-3 times the deposit amount if you wrongfully withheld anything.

Related: 7 Tips for Preventing Security Deposit Disputes

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67 CommentsLeave a Comment

  • Isadora Lopez

    I have a roommate that was evicted and supposed to leave by the end of December, she got a lawyer to give her till January 14th to vacate. In this time she didn’t pay the power bill for November or the water bill. In addition, she also left on the 3rd of January after we informed the new tenant that she couldn’t move in until the 14 causing us to lose the new tenant. I told her in person and in text to clean her room out the way she found it when she moved in and she would get her security deposit. When she left there was cat litter on the floor, sand, water bottles etc as well as food in the refrigerator and pantry. We still need her to pay the December power bill. Do we have any rights to hold the security deposit of deduct anything?

  • Monica

    Looking for information regarding NYS laws regarding if someone has to break a lease based on domestic violence.

  • Winter

    I’m out of league here. Too much brain power on diaypsl!

  • Lynn

    I hate my life but at least this makes it belbarae.

  • Alicia

    Can a landlord charge more than the security deposit for painting two bedrooms from kids coloring on the walls in the state of Texas? The deposit was 600.00. The landlord is trying to say it’s going to cost 1200.00 to repaint the rooms.

    • Henry

      You let you kids color on the walls ? Why didn’t you clean it off or paint over it before you moved out ?! This is the kind of behavior that makes me not want to rent to people with kids or animals .. 👎

      • barb

        I have a tenant that just got out today, Had to really push them out.Supposed to be out 5 days previously. The damage they have caused, Blinds missing, bar stools broken or missing. Screens ripped or gone, scratched antique doors. filthy rooms with mold in the showers. Didn’t cut the lawn all summer.Need I go on. The worse part is that they don’t see the huge mess. They are mad at me for wanting them gone. How dare I get rid of them. Told them I wanted them gone couple months after they moved in. They did more damage in one year than my family did in 15 years. I am looking to sell my houses after having these renters from hell. Like another renter said when she saw my place. One bad renter can ruin it for every good renter.

        • Kelly

          How do you charge for something like scratched floors and mold in showers?

          I’m new to this. My first tenants moved out and left a frustrating mess.

          Like an oven that was absolutely caked with sludge and grime on all surfaces!

  • Candy Pannese

    I just moved out on the 1st of March 2017 i haven’t received my refund deposit they keep telling me that they sent it with an itemized document what should I do

    • Me

      They are required to send it via certified mail. Ask them for the receipt number then call the postal carrier. They are probably lying and if they are not the postal service should be able to tell you where it is at.

  • Jessica

    Where do ceiling fans fall in this topic? Can a landlord hold any security deposit for dirty ceiling fans? I did clean them sporadically just forgot at move out.

  • Lakeisha

    I moved out over 45 days ago the house had new tenants days. Im due a 990.00 deposit I received a letter from the landlord saying 750.00 for stained carpet. 120.00 for cleaning and disposal. 50.00 for lawn care. 120.00 for broken dishwasher. 100.00 for torn blind. 200.00 for broken dishwasher. 150.00 for motion light. 150.00 for a broken window. Landlord is lying what can I do?

  • Chris

    I provided a new refrigerator to the tenant without warranty. I’m located in CA. It’s been three years and during the check out I noticed the refrigerator body is crack. I got 2 quotes that it is not repairable. Would I be able to deduct it from the security deposit?
    Thank you

  • shayla

    hi I moved into my apartment last year on 7/29/16 our lease ended on 7/31/17 n we have decided to move out because on Thursday 7/27/17 we found bedbugs we have never had any bugs in our lives n so I messaged the landLord rightaway telling her about the bedbugs all she did was buy 2 packs of foggers and 2 cans of spray which we used it did not help so 7/31/17 had messaged her telling her were moving for the safety of our daughter and all the sudden since I told her we were moving then she wanted to leave a voicemail saying she called an exterminator blaming us for them but the ppl upstairs moved out as well it could be frm them it could have came from sitting at docs and someone had them who knows but my ? is can she take our security deposi

  • Jim Reed

    My landlord is charging me for landscaping rock but he isn’t replacing it. He is getting estimates from a long time friend or the replacement of a refrigerator drawer and the cost is $250. to replace it. The refrigerator is 12 years old and he never replaced it I was charged a $85 service charge and a $65 delivery charge and the repairman and landlord admitted that neither one of them have been to the house to see the refrigerator. They are working to replace the refrigerator. Thier was no rock removed by myself nor did I break the drawer. What can I do?

  • theresa colaianni

    Hi Jane,
    Our landlord did our walk thru,We lived there for 6.5 years. She kept 75.00 for “cleaning the fan blades”. We got the rest of our deposit back. 4 days later after her family she moved in, She stopped payment on the check, She said she had to paint the walls and her over 15 year old carpet has a smell. My husband spackeled all the nail holes, because she was suppose to paint and freshen up the place. We took very good care of the home as if it was our own. We lived in sedona az and we only had a swamp cooler. The house also had mold spots show up on ceilings and walls. At the time I would just scrub them. So between the swamp cooler. DO we have any rights to get our deposit back? I feel like she stole from us

  • Sherry

    I am inquiring on security deposit when I was given notice the day after the rent was due notice that they are using the last months rent. The lease agreement states 30 days notice, so I am confused if this is considered ample notice??? The tenants also had a fire in my home. Insurance repaired, but the room is now a different color, different color carpet, etc. There are many things I know I can deduct like the flea infestation, but can I hold if i had to physically paint 9 doors inside and out due to kids writing on the doors and walls? HELP…so glad they are gone. Oh one last thing, they asked that I email them the itemized receipt when I asked for a forwarding address to send certified. Can they do that as well?

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