A new tenant must pay a landlord security deposit, along with their first month’s rent, upon moving in. That tenant will get their deposit back upon moving out, if they follow their lease’s terms. But what if they break any of those terms? Do you have to return their full deposit then?
The answer is no. Should they break a lease’s terms, you do not have to return the entire landlord security deposit.
When You Can Keep the Landlord Security Deposit
Every state has specific landlord security deposit laws you and your tenant must follow. These laws include situations in which you can keep a tenant’s security deposit. A landlord attorney at Rogers & Rogers, Esq. can provide more information, as well as advise you as to how you can protect your rights as a landlord.
Below, we discuss five times you’re entitled to keep a tenant’s security deposit.
1. Early Lease Termination
Your tenant must stay the full term of their lease. If your tenant breaks the lease, they will lose their landlord security deposit. You may use your tenant’s deposit to cover costs associated with this breach.
Make sure to include an early termination clause in your tenant’s lease agreement. Your tenant will need to abide by this clause. If they do not abide by the early termination clause, you may keep their security deposit. You can even include a clause within the agreement giving you the right to charge the tenant court costs should you need to take legal action.
2. Failure to Pay Rent
Your tenant must pay their lease’s full cost of rental each month. If your tenant fails to pay this rent, most states allow you keep their landlord security deposit. Failure to pay rent is considered a breach of lease. You can keep a portion of their security deposit to cover their unpaid rent. However in NYC the court will almost never allow you legal fees where the tenant is rent stabilized or rent controlled.
3. Property Damages
You can keep a tenant’s security deposit if they’ve caused damages to the rental property. However, these damages are different from normal wear and tear. If the rental unit shows signs of normal wear and tear, you cannot keep the tenant’s security deposit. Here are some examples to help differentiate between normal wear and tear from property damages:
Normal Wear and Tear Includes:
- Small nail holes in the wall caused from hanging pictures
- Small carpet stains
- Mildew growing between shower tile grout lines
- Bathroom fixture tarnish
- Loose kitchen or bathroom cabinet doors or handles
- Leaky faucet pipes
Damages to the Property Includes:
- Large and/or multiple holes in the walls
- Big carpet stains
- Excessive hardwood floor water damage
- Any outlet covers missing
- Damage to carbon monoxide or smoke detectors
- Bathroom and/or kitchen countertop cracks or damages
- Bathroom vanity damages
- Cracked or broken windows
- Damages to any door
- Lost keys not returned upon tenant move out
4. Rental Cleaning Cost
If excessive cleaning is needed beyond normal wear and tear, you may be able to keep a tenant’s security deposit. Here’s an example to help you identify what is considered excessive cleaning. If your tenant leaves behind a bag of trash in their rental unit, you cannot charge that tenant a portion of their security deposit to clean it. However, if your tenant leaves behind trash scattered throughout the apartment and multiple personal belongings, then you can use a portion of their security deposit to clean it. Save all receipts for services.
Another example of excessive cleaning would be if your tenant had a pet that used the carpet as a bathroom. In that case, you can charge your tenant the carpet costs of cleaning the carpet, or replacement if necessary.
5. Failure to Pay Utilities
All tenants must pay their utility bills on time. Should your tenant fail to pay these utility bills, they may not be entitled to their full landlord security deposit. You may keep a portion of that deposit to cover any unpaid utilities. We recommend in all cased that the tenant pay their own utility bill in the lease and that tenant have their own meter.