6 Reasons Landlords can Deduct from a Security Deposit

Many tenants struggle to get their entire security deposit (or damage deposit) back when their lease agreement ends. Some renters think that hovering the floor and wiping the dust before leaving is enough, and then are surprised when they get security deposit deductions. Landlords usually have a long inspection list detailing the tenant’s obligations prior to moving out.

So if you want your moving experience to go as smoothly as possible, knowing what your landlord can and cannot deduct from the deposit, will surely help.

What can a landlord deduct from your security deposit?

Deposit reduction is normally determined on the lease agreement and the particular landlord-tenant laws in the state/country. In most cases, a detailed inventory list is made as a part of the contract before a tenant moves in. This list contains all items in the property, along with the condition of the walls, carpets, furniture, appliances etc.

The landlord checks the condition of the property according to the inventory when the time comes for the tenant to leave. The rental property should be in the same conditions as in the beginning.

So for your convenience, we have made a list of the most common reasons why landlords usually deduct money from a deposit:

#1 Breaking the lease or terminating early

Your landlord can keep part of the security deposit, or even all of it, in case you break the agreement. Usually, this is in order to cover any possible costs caused by the breach.

For example, if there is a clause for early termination of the contract, you have the obligation to stick by these terms. Normally it takes weeks and even months, to find a replacement tenant and this can cause financial issues for the landlord.

#2 Missing items

Landlords have the right to make deductions for missing items. Carefully check the inventory list before you move out to make sure that nothing is missing…

#3 Unpaid rent or utilities

You can definitely lose your deposit if you are late on paying the utility bills or if the rent is not paid. The landlord will probably have to keep the security deposit in order to cover those debts.

#4 Keeping pets

Unfortunately for many people, pets tend to make a mess of an apartment or a home. So if you have a dog or a cat, the chance of your landlord deducting money from the deposit is even bigger. Any damage caused by the pet or a nasty lingering smell in the common area can be a reason for a lost deposit.

Any changes to the framework of the rented property without your landlord’s permission could count as damage, so always think carefully before making any pet structures.

If no damage was done, the landlord can’t deduct money just because a pet was in the house. This applies even if the tenancy agreement does not allow to keep pets.

#5 Cleaning Cost

All domestic work such as cleaning the property before moving out is the tenant’s responsibility. You have to leave your apartment or house in the same conditions as when you moved in. If you choose to neglect this step, the landlord can retain the money necessary to cover the cleaning cost. And will surely aim for high-end services rather than mind the price after tenants leave, while all costs on cleaners will be withheld from the tenancy deposit.

If your property has a patio deck, garden area, driveway or a parking lot, all these areas are either assigned as in the housing agreement. Don’t forget that they fall in your tenant cleaning responsibilities too! For a full list of everything that needs to be cleaned at the end of your tenancy agreement, see our end of tenancy clean checklist.

#6 Painting Costs

Usually, it is a landlord responsibility to repaint every few years for basic maintenance. This is why they normally can not deduct the cost of paint from the deposit. However, if you painted the walls or have made a significant damage to the paint, your landlord has the right to use the security deposit to cover the repainting.

Deductions a landlord cannot make

Typically, landlords may charge tenants for cleaning or restoration to the rental units.  However, a landlord cannot use your security deposit to cover the costs of ordinary wear and tear. And the longer you have been living in a property, the more wear and tear can be presumed.

Upon moving in, both the tenant and the landlord should conduct a walk-through inspection according to the inventory list. The best practice is to take pictures and document the condition of the property and its internals. Any existing damage should be recorded prior signing the inventory list.

What is normal Wear and Tear and what does it include?

Ordinary wear and tear is damage that naturally occurs in property due to aging and utilization. This is contrary to damage caused by tenants as a result of negligence, carelessness or abuse.

In the guide below we are going to provide examples of normal wear and tear vs damage caused by the tenants.

Takeaways

No matter if you are a first-time landlord or have been in the business for a while, there some mandatory maintenance and cleaning duties that need to be met according to the most tenancy agreements.

This includes things like paying utility bills, obeying rules about keeping pets in the home and generally following the agreement you have signed off.

The only exceptions that the law allows are the so-called “wear and tear” damages that come naturally with time.

Header image source: Shutterstock / bluedog studio