It’s common practice for landlords to collect a security deposit from a new renter at the beginning of a lease. Unless there is unpaid rent or damages to the property beyond normal wear and tear, the landlord returns the security deposit when the renter leaves the property. Typically, the landlord provides the renter with a security deposit return letter at the end of the rental agreement in addition to the full, partial, or retained security deposit.
What is a security deposit return letter?
A security deposit return letter is an official letter from the landlord to the renter that (a) states how much of the security deposit the landlord will return and (b) itemizes any deductions the landlord is making to cover repairs, damage, or unpaid rent. Some states require the landlord to send a security deposit return letter to the renter before they can keep or use the renter’s security deposit. Each state has different laws concerning rental properties and security deposits. Always check the rules for your state to ensure you’re meeting all your legal obligations as a landlord.
What deductions can a landlord make?
The rental agreement should clearly state what qualifies as normal wear and tear and what situations may cause security deposit deductions. Most leases define the reasons for deductions to prevent disputes or legal action when the lease ends. Some states detail the condition(s) that must be met before a landlord can keep a renter’s security deposit, though a few other states do not have specific rules. Here are common situations that warrant security deposit deductions:
- Damage done to the rental property
- Cleaning costs above normal expectations
- Removal of renter’s abandoned belongings
- Early lease termination penalty or fee
- Recovery of unpaid or past-due rent
- Unpaid utilities
Why do you need a security deposit return letter?
Whether you’re returning all, part, or none of the renter’s security deposit, it’s important you send the renter a security deposit return letter. If you aren’t returning any of the deposit, you can explain why in the letter. Perhaps you’re returning only part of the renter’s security deposit. In that case, you can list the deductions and show how much of the deposit you’re returning. Additionally, if you’re giving back the entire deposit amount, you’re not obligated to send a letter alongside the security deposit, but sending one is still a nice touch.
When mailing a security deposit return letter, you should send the letter and deposit (if you’re mailing a check) through certified mail. With certified mail, you have proof that you followed through on your obligation. Hopefully, your renter provided a forwarding address when they moved out. If not, you’ll need to contact them by phone or email to obtain their new contact information. If you can’t get your renter’s forwarding address, you may send the letter to the renter’s last known address — i.e., your rental property — and hope it’s forwarded by the post office.
What should you include in a security deposit return letter?
Depending on the state, some laws require landlords to include specific information in the security deposit return letter, while other states don’t have any rules about the letter’s content. Normally, you want to include an itemized list of why you’re withholding funds and the amount of each line item. You can also preemptively provide documentation in the form of pictures or receipts if you think the renter might dispute your reasons. Some states hold the landlord liable if the renter makes a dispute and the landlord can’t produce documentation.
Here is a list of what to include in a security deposit return letter:
- State that you’ve attached a financial statement of deductions
- List each deduction, including its amount, and add an explanation
- State the sum of all the deductions
- Include copies of any documentation, like cleaning or repair bills
- Provide a check with the renter’s remaining balance, if there is one
Example security deposit return letter for a full refund
05/31/2021
Mr. John Miller
789 Park Street, Orlando, FL 32810
RE: Security Deposit Refund
Dear Mr. Smith,
This letter is regarding your security deposit in the amount of $1,000 for the rental unit at 543 Main Street, Tampa, Florida, from your one-year lease period of 06/01/2020 to 05/31/2021.
I’m pleased to notify you I am refunding your entire security deposit for the full amount of $1,000.
You were a wonderful renter, and I wish you the best in your future endeavors.
Sincerely,
Mark Williams
Example security deposit return letter for a partial refund
05/31/2021
Mr. John Miller
789 Park Street, Orlando, FL 32810
RE: Security Deposit Refund
Dear Mr. Smith,
This letter is regarding your security deposit in the amount of $1,000 for the rental unit at 543 Main Street, Tampa, Florida, from your one-year lease period of 06/01/2020 to 05/31/2021.
I’m deducting $300 from your $1,000 security deposit to pay for the following:
- $200 for carpet cleaning per pet policy in the rental agreement.
- $100 for repainting the living room because of marks on walls.
I am refunding your partial security deposit in the amount of $700. I wish you the best in your future endeavors.
Sincerely,
Mark Williams
Example security deposit return letter for no refund
05/31/2021
Mr. John Miller
789 Park Street, Orlando, FL 32810
RE: Security Deposit Refund
Dear Mr. Smith,
This letter is regarding your security deposit in the amount of $1,000 for the rental unit at 543 Main Street, Tampa, Florida, from your one-year lease period of 06/01/2020 to 05/31/2021.
I will not be returning your $1,000 security deposit in order to cover the following:
- $900 for one month’s rent due to failure to pay May 2021’s monthly rent before moving out.
- $100 for electric bill due to failure to pay May 2021’s electric bill before moving out.
The total cost to cover these unpaid expenses is $1,000. I wish you the best in your future endeavors.
Sincerely,
Mark Williams
One of the easiest ways to collect rent and return security deposits is to use Zumper’s rent collection service. Our online tool streamlines rent collection, tracks and schedules payments, provides bank-level security, and offers next-day payments.
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