What is a Security Deposit?
A security deposit is simply money a customer puts down to insure against potential loss and damage to the item being rented or used. A security deposit gives the customer “skin in the game” and helps ensure that they properly care for any property in their possession that they do not own.
Why Do Landlords Collect Security Deposits?
Landlords collect security deposits to cover the cost of repairing damage to their property caused by a tenant during their tenancy. If the tenant moves out of the property and there is no damage, then the landlord must return the security deposit to the tenant in full. If there is damage, the landlord may reduce the amount of money returned to the tenant based on the cost of repairing the damage. If the cost of repairing the damage exceeds the security deposit amount, the landlord may keep the entire deposit and even take the tenant to court to sue for the remaining balance.
Here at Douglas Realty Property Management, we keep all deposits for the properties we manage safely in escrow. When a tenant leaves a property, we thoroughly inspect it for any damage and deduct repair costs from the security deposit as allowed by law.
How Much are Security Deposits?
The amount of a security deposit on the property will vary widely from landlord to landlord. There is no set rule for how much a security deposit must be, nor is there a maximum amount. Most often, the security deposit when renting property is equal to one month’s rent. For example, if the property rents for $900 per month, then the security deposit would be $900 as well.
Why Can a Landlord Keep a Security Deposit?
There are many reasons why a landlord might keep all or part of a tenant’s security deposit. Any damage to the property other than normal wear and tear can be deducted from the security deposit. For example, if the tenant paints all the walls without the landlord’s approval, the landlord can charge the tenant for the cost of repainting the walls back to their original color. If the tenant breaks an appliance and does not have it repaired, the cost of that repair can be charged to the tenant. There are far too many examples of damage covered by security deposits to list here.
What are the Reasons Landlords Cannot Keep a Security Deposit?
As mentioned before, anything that is considered normal wear and tear is not covered by a security deposit. Normal wear and tear will depend on many factors. For our wall painting example earlier, if the tenant did not paint the walls but there were some paint chips and discolorations from normal use, then the landlord could not use the tenant’s security deposit to cover repainting. In our appliance example, if an appliance provided by the landlord breaks down due to age, then the landlord is responsible for replacing the appliance, not the tenant.
Property Management in Southwest Florida
If you’re in southwest Florida and want to make passive rental income without having to deal with escrow and security deposits, Douglas Realty Property Management has got your back. We help property owners all over Florida maximize their profits and minimize their stress with our elite property management services. To find out how we can help boost your rental revenues, contact us at (239) 542-6906 or online today.