Security deposits are one of the biggest sources of conflict between landlords and tenants. Knowing exactly what you can and can’t deduct will protect you legally and save you from costly disputes.
What You CAN Deduct
- Unpaid rent. If a tenant leaves owing rent, you can deduct the balance from the deposit.
- Damage beyond normal wear and tear Holes in walls, broken fixtures, stained carpets, and missing items are all fair game.
- Cleaning costs. If the tenant leaves the property significantly dirtier than they found it, you can charge for professional cleaning.
- Unpaid utilities If utilities were in your name and the tenant was responsible, unpaid balances can be deducted.
What You CANNOT Deduct
- Normal wear and tear: Small scuffs on walls, minor carpet wear, and faded paint are considered normal and cannot be charged to the tenant.
- Pre-existing damage. This is why your move-in inspection report is so important. You cannot charge for damage that existed before the tenant moved in.
- Repairs you were already responsible for. Routine maintenance is your responsibility as a landlord.
Important Rules to Remember: Most states require you to return the security deposit within 14 to 30 days of moveout, along with an itemized list of any deductions. Missing this deadline can result in penalties, sometimes double or triple the deposit amount.