Returning the security deposit is just as important as collecting it. Failing to return any unused portion of the deposit in accordance with applicable law can expose a landlord to fines, penalties, and potentially additional damages. If you keep any portion of the deposit, make sure you are ready to prove your damages.
Before the tenant moves in, take detailed photographs of the property and create an inventory documenting its condition. Photo metadata can also help establish when and where the photographs were taken.
I always ask the tenant in writing, when they initially take possession, to notify me of any existing damage and provide photographs. If they fail to respond, I can argue that they had no damages to report at the time they took possession and that their failure to identify any issues supports the condition documented by the landlord.
When the tenant moves out, conduct another thorough inspection and photograph any damage beyond normal wear and tear. If you plan to deduct money from the security deposit, keep receipts, invoices, or other documentation supporting the cost of the necessary repairs or replacements.
Wear and tear is the normal, gradual deterioration that occurs from a tenant’s ordinary and reasonable use of a property.
Examples of normal wear and tear
- Minor scuffs or marks on walls
- Faded paint from normal exposure to sunlight
- Minor nail holes from hanging pictures
- Worn carpet in high-traffic areas
- Minor scratches on flooring from ordinary use
- Loose door handles or cabinet hardware from normal use
- Gradual aging of appliances or fixtures
Examples of damage
- Large holes or excessive holes in walls
- Broken doors, cabinets, or fixtures
- Stains or burns on carpet beyond ordinary wear
- Significant damage to flooring
- Broken windows or screens
- Missing fixtures or appliances
- Unauthorized alterations
- Excessive trash or debris requiring unusual cleaning
- Damage caused by a tenant’s negligence or misuse
The key distinction is cause and degree: wear and tear is expected from ordinary use over time, while damage is deterioration that goes beyond what a reasonable landlord would expect from normal occupancy.
Accurate records are essential whenever you withhold any portion of a security deposit. State laws establish specific requirements for when and how deposits must be returned, as well as what notices must be provided when deductions are made.
