In a way, the security deposit a landlord collects is the insurance policy for any damage that may happen do to an irresponsible renter. It is common for the landlord to get this deposit as soon as a new tenant moves in, and then hold onto it until they move out.
When the tenant moves out, the property is inspected and if there have been no damages, the deposit is then returned to the tenant. If there are damages, part or all of the security deposit is retained by the landlord in order to offset repair costs. In many cases, the amount of the security deposit is one month’s rent, but it can be higher or lower depending on the circumstances.
If a renter will be subletting an apartment, it is important to increase the deposit amount in case of unforeseen issues arising from the other renters.
While you can always take someone who is subletting to court, it is a much more practical and just an easier task to just request the larger deposit to begin with.
Before taking a security deposit, the landlord and potential tenant should view the property together and come to an agreement on the initial state of the rental unit. If there are any pre-existing circumstances in regards to the property, these should be carefully noted in the rental agreement.
A good idea is for the property owner to take pictures of the place before the tenant moves in so there is evidence of the state of the place. After the lease is over, these photos can be used to make a comparison.
During the process of initiating a deposit the property owner needs to be aware of all the legal requirements. These will depend on which state you live in so make sure you know what your responsibilities and rights are from the start.
Undoubtedly, there are restrictions as to when a landlord can keep the deposit or when a tenant can request a refund. Ensure both parties understand these terms and conditions, and make sure you check with the city’s guidelines too, since every city is different than the other.
This writer has been writing on subletting for the previous three years. In addition, this individual loves writing about New York City neighborhood topics, like Gramercy apartments along with Lower East Side condos.
Tags: advice, family, finance, home, insurance, investment, Leases, legal, personal finance, property insurance, real estate, Rentals, security, wealth building