What Is a Security Deposit?

You’ve found your dream place to rent, and now it’s time to make sure you make the necessary payments to secure that apartment. Understanding the cost and terms of your security deposit is a key part of agreeing to your lease. Here’s the ultimate guide to what you can expect when you pay a security deposit so you can make sure you get that perfect apartment — plus get your deposit back when it comes time to move out.

So, what is a security deposit?

A security deposit is an amount of money you provide to a landlord or property management company that serves as proof of your intent to move in and take care of the house or apartment you’re renting.

You can think of your security deposit like an insurance policy for landlords to protect themselves against unpredictable residents. The landlord will hold onto your money just in case you damage the unit (or skip out on paying rent). If you do violate the terms of your lease, you can lose those hundreds or even thousands of dollars.

The good news is that security deposits are meant to be refundable. So, if you know you’re a good resident and you’ll leave a place you’re renting in good shape, there’s a good chance you’ll get that money back. On the other hand, unexpected things can happen over the course of your lease, so you want to know when a security deposit comes into play.

How much will you pay for a security deposit?

A few factors go into calculating a security deposit, so the typical amount will depend on your specific circumstances. The framework for calculating a security deposit also depends on the location of the property. Some states don’t set a limit to security deposits, while others do. You may also have to add more to the overall deposit if you have a pet in your apartment. Generally speaking, a security deposit can be the same price as your monthly rent and sometimes even more.

Your credit score also plays a big part in determining your security deposit. Landlords and property management companies can access your credit information, and they’ll use it to gauge the level of risk you pose when renting. If you have a low credit score, your landlord could consider you a bigger risk, and thus charge you a bigger security deposit. Checking your credit score ahead of time will help you know where you stand before you start the apartment hunt.

Pro-tip: Understand the differences between your security deposit and extra fees when you calculate your expenses. Extra fees can range from pet fees to application processing fees, so make sure you don’t lump those in with the security deposit and have the landlord or management company asking you for the money you already paid.

When will you pay your security deposit, and when will you get it back?

You’ll need to pay the security deposit before you move in, typically along with your first month’s rent. Many times, the property management company or landlord will give you a checklist of the payments you’ll need to make before you move into your new place. You should ensure you get your security deposit in on time — failing to do so could cost you the apartment you want. 

The timeline you can expect for getting your security deposit back after move-out also varies depending on where you’re living. A typical range is anywhere between 14 and 60 days after you move out.

When won’t a landlord return a security deposit?

You can expect the landlord or management company to take out small itemized expenses (say, for significant cleaning or replacing a broken doorknob) from your security deposit if you don’t leave the unit in stellar shape when you go. Still, you won’t usually have your entire deposit withheld for smaller issues like this.

However, certain scenarios exist when a landlord or property management company can legally keep part or all of your security deposit. Examples include:

• Breaking a lease or terminating the lease early: If you break your lease, your landlord can keep part or all of your security deposit to cover the costs that come from this breach. Whether or not they do this and to what extent depends in part on laws in your location and the wording of the lease, including any early termination clauses.
• Nonpayment of rent: Most states allow the landlord or management company to keep all or part of your security deposit to cover any income lost if you stop paying your rent.
• Nonpayment of utilities: If you don’t pay your utility bills, you may not get your security deposit back. A landlord can keep that cash to cover utilities you’ve neglected to pay as part of the lease.
• Damage to the property: While landlords can’t typically keep a security deposit to cover normal wear and tear (think: reasonable amounts of dirt, a few small stains on carpeting, dirty grout), they can keep it to cover actual damage to the property. If you make huge holes in the walls, cause extensive water damage, crack a countertop, or don’t return your keys when your tenancy ends, expect to pay up.
• Excessive cleaning costs: Likewise, landlords can’t usually deduct from your security deposit to cover normal costs of cleaning. However, if you leave trash all over your unit or don’t clean up a pet’s messes, the landlord can withhold your security deposit to cover the cost of cleaning or replacements.

Paying a security deposit is an essential part of the process for just about any place you want to rent. Knowing the ins and outs of how these deposits work can help you approach your apartment search with confidence, then make sure you fulfill the terms of your agreement so you can get your security deposit back when it’s time to move out.

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