How Much Can Landlords Charge?
Security Deposits are one of the most challenging topics for Landlords and Tenants to deal with.
The purpose of a deposit is to protect a landlord in the event a tenant does not comply with the terms of the rental agreement. This could happen if the tenant doesn't pay rent, leaves before the term of the agreement is up, leaves a mess when they move out or causes damage to the unit which is beyond normal wear and tear.
In the past, landlords collected the last month's rent and an additional security deposit. The deposit was smaller than a month's rent, usually a couple of hundred dollars. More recently, the practice of collecting last month's rent has disappeared and security deposits are higher, usually equal to at least one month's rent.
This "standard" security deposit is reserved for tenants that meet all of the qualifications with regard to income, credit and landlord references. If an applicant does not meet the qualifications in al of these areas, landlords should increase the required deposit. This makes sense because when all of the qualifications are not met, there is an increased risk that the tenant will not fulfill all of the terms of the rental agreement.
Security Deposits are defined as any monies collected from the tenant other than rent. Beside the normal "security deposit" this includes key deposits, pet deposits, cleaning deposits and even last month's rent or any additional rent which is not for the first month. In short, a security deposit includes ANY monies collected other than first month's rent.
The maximum amount of deposit that can be collected is a matter of law. If the rental unit is unfurnished, meaning furniture and household items are not supplied, the maximum deposit allowed is two times the monthly rent.
Let's look at a couple of examples:
- Rent is $2,000. You want to collect the maximum security deposit allowed so you collect first month's rent of $2,000 and a security deposit of $4,000 (two times the rent).
- Rent is $2,000. The tenants have a dog so you want a $500 pet deposit plus the maximum security deposit. You CANNOT collect a security deposit at $4,000 in addition to the pet deposit. The pet deposit of $500 is considered a part of the security deposit. You can however collect the first month's rent and a total security deposit of $4,000.
- The rent for an apartment is $895 per month. The landlord is asking for the first month's rent of $895, last month's rent of $895 and a security deposit of $1,000. This is NOT permissible. Last month's rent combined with the security deposit exceeds the maximum deposit of $1,790 (2 times the rent). In this case, the maximum deposit the owner could request is $895.
How Tenants Can Get It All Back?
When a tenant moves out, the biggest "battle" between landlords and tenants begins. It's a battle over how much the landlord will charge for damages to the unit.
The tenant remembers that the unit was in need of cleaning and repair when they first moved in. The landlord remembers that the unit was immaculate and in perfect condition. The tenant feels that the unit was perfectly clean and the paint looked great when they moved out. The landlord only sees dirt, grime and marks all over the walls.
This difference of opinion is what keeps our small claims courts busy. There are more cases about security deposits in our system than any other issue. And most of these cases could be eliminated if a few simple steps were followed. Here they are:
When you move into a unit, write down about the condition of the unit. Include any spots in the carpet, areas that are not clean, broken windows, torn screens, missing window coverings, and any other "imperfection" that you see. Send a copy to the landlord and keep one for yourself. Make sure it is dated. You may even want to take pictures.
Then when you move out, make sure you give a copy of this move-in inspection to your landlord. If you have cleaned the carpet or paid someone to clean the unit, give the landlord a copy of the invoices for this work too. Again, you may want to take pictures and give the landlord a copy.
This will remind the owner of the condition of the unit when you moved-in and help you get most, if not all of your deposit back.