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5 Things Landlords Deduct from Security Deposits

Last Updated: October 11, 2023

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Key Takeaways:

  • Landlords can use funds from security deposits for excessive losses or expenses caused by tenants.
  • A tenant’s security deposit may end up covering costs for repairs, painting, cleaning, and item removal or disposal.
  • The best way to determine whether a tenant should receive their security deposit is by using an Inspection Report.

Generally, if tenants have made all their rent payments and kept the rental unit in good condition, they should get their security deposit back.
When it comes to leaving a rental unit in good condition, some renters think that sweeping a broom across the floor while moving out is enough. These renters are often surprised when they only receive a portion of their security deposit back.
The truth is landlords can use funds from security deposits for excessive losses or expenses caused by tenants.
Let’s look at five things landlords can deduct from security deposits.

What can a landlord deduct from a security deposit?

The deductions that landlords can take from security deposits depend on two things:
  • State law: Since landlord-tenant laws are different from state to state, the permitted security deposit deductions vary. It’s essential that landlords check their state’s laws before using a tenant’s security deposit.
  • Lease terms: The terms of a Residential or Commercial Lease Agreement can outline when a landlord can deduct from a security deposit. Tenants must read the fine print of their lease before signing so they understand when their landlord can make deductions.
Keep in mind, if the law says one thing and the lease says another, the law will override the lease.
Generally, landlords can use a tenant’s security deposit to cover costs associated with repairs, painting, cleaning, and item removal or disposal. Landlords may also use a security deposit to cover unpaid rent or utility bills.
Let’s take a deeper look at these potential deductions.

1. Repair costs

The most common deductions that landlords take from security deposits are repair costs to fix tenant-caused property damage.
After signing a lease and moving into a rental property, tenants are expected to maintain it and do their best not to cause damage. In fact, a tenant’s goal should be to leave a rental property in the same condition as when they initially moved in. But sometimes, tenants cause damage, despite their best efforts.
When a tenant damages a rental property and doesn’t pay to repair it themselves, the landlord may be able to deduct the necessary repair costs from the security deposit.
Generally, landlords can use security deposits to cover costs associated with:
  • Repairing walls due to plugs, large nails, or any unreasonable number of holes in the walls
  • Unclogging toilets, sinks, and drains
  • Replacing or fixing damaged or missing doors, windows, screens, mirrors, lights, appliances, or other fixtures
  • Repairing cuts, burns, or water damage to linoleum, rugs, and other areas
  • Repairing any plumbing or water damage that was caused by open windows
Luckily for tenants, they generally cannot be held responsible for “reasonable wear and tear.”
Reasonable wear and tear is natural deterioration that occurs over time, even with reasonable care and maintenance. It’s caused simply by the people using the property. Things that fall into this category include carpets wearing down, or scuffs and patches on the hardwood from being walked on.
Wear and tear doesn’t include deterioration caused by misuse or negligence. This means something like punching a hole in a wall doesn’t count as reasonable wear and tear.
How to track tenant-caused damage
The easiest and most reliable way to track damage is by using a Rental Inspection Report. This report allows you to document a rental property’s condition before the tenant moves in and after they move out. Beyond sometimes being legally required, Rental Inspection Reports ensure that:
  • Landlords can track tenant-caused damage
  • Tenants aren’t held responsible for a previous tenant’s damage
When a landlord uses funds from a security deposit, they should return the remaining amount (if any) with an itemized receipt detailing how the money was spent. When funds are used to repair tenant-caused damage, the landlord can refer the tenant to the inspection report if they challenge the deductions.

2. Painting costs

Can a landlord make a tenant pay for painting costs?
A landlord usually has to repaint a rental unit every few years for basic maintenance. In that case, they can’t deduct painting costs from a security deposit. Landlords can only use a security deposit to pay for painting costs when a tenant has painted over the original color or damaged the walls.
First off, tenants should always check their Lease Agreement before painting a rental unit. If the lease doesn’t specify whether they can paint, then they should ask their landlords. The best way to get a security deposit back at the end of a lease is by following the lease terms.
Many landlords let tenants paint if they agree to return the walls to their original color before moving out. In that case, a tenant’s security deposit is safe as long as they do the necessary repainting. If they don’t, their landlord may be able to use the security deposit to have the walls repainted.
Some landlords do not permit tenants to paint. This stipulation is especially true if a rental unit is professionally painted.
If a tenant has put an unreasonable amount of holes in walls and the landlord has to fill them and repaint them, the landlord can deduct from the security deposit to cover their costs.

3. Cleaning costs

When a tenant leaves a rental property without properly cleaning it, their landlord may be entitled to keep some or all of the security deposit. This is especially true in cases where a landlord has to hire a professional service to get the rental unit back to its original state.
Tenants may not get their security deposits back if the rental unit has any of the following:
  • Excessive mold or mildew build-up
  • Pet messes like urine stains
  • Extreme dirtiness
  • Pests
If tenants leave behind a couple of dust bunnies on a hard-to-reach shelf, the landlord shouldn’t deduct any costs from the security deposit. They only use deposit funds for the clean-up of inconvenient messes that cost the landlord time and money. For example, when tenants have caused a pest infestation, the landlord will likely use their deposit to pay for extermination costs.

4. Removal or disposal costs

When tenants move out of a rental property, they shouldn’t leave anything behind. Abandoning items may entitle a landlord to deduct moving or disposal costs from the security deposit.
If tenants leave behind a few small items, such as some glassware or cutlery, they likely won’t run into any issues. The landlord will either dispose of them or leave them in the unit for the next tenant.
However, suppose a tenant leaves behind large, cumbersome items that are difficult to remove, such as a mattress or sofa. Often, you can’t just put these items out for garbage collection.
Landlords may have to rent a larger vehicle to take these items to a landfill or collection site—a major inconvenience. In addition, some landfills and collection sites charge fees for disposing of things such as mattresses, sofas, kitchen appliances, and air conditioners.
In that case, their landlord may deduct removal or moving costs from the security deposit.

5. Unpaid rent and utilities

At the core of the landlord-tenant relationship is the agreement that the tenant will pay rent in exchange for living in a rental property.
If a tenant has unpaid rent at the end of their stay and moves out without paying, a landlord may be able to take the unpaid rent amount from the security deposit. If a landlord is permitted to charge late fees, they could deduct them from the deposit as well.
The same goes for utilities.
Suppose a tenant moves out without paying their last month’s electricity, gas, and water bills. As the legal property owner, the landlord may be held responsible for the outstanding utility bills. To cover their costs, the landlord may deduct the amount owed from the deposit.

Here’s the bottom line

The general rule is that as long as tenants have paid their rent and left a rental property in the same condition as when they moved in (or as close as humanly possible), they should get their entire security deposit back.
The best way to ensure fairness and accuracy is to do a thorough walk-through upon moving in. Plus, it’s best practice to take photos to document everything. This helps prove who is responsible for the damages and the repair costs.