Around 83% of renters return to their landlords with a deposit in hand. When you’re a landlord of a rental property, deposits make a lot of sense. They’re a way to secure unpaid rent and withheld damages for your project.
But what should your security deposit be used for? How high can you set its limit?
In this article, we’ll introduce you to security deposits and give you a few key facts to make sure you can rent your property with confidence.
What Is Security Deposit?
A security deposit is a sum of money that tenants pay when starting a lease for a rental property, otherwise known as the security bond.
This money is held by the landlord in a separate account specifically for the purpose of ensuring that the tenant will fulfill the terms of the rental agreement, such as paying rent and keeping the real estate in good condition.
It can range from a few hundred dollars to a few months of rent. When moving out, tenants must provide proper documentation that the rented property was in good condition when departing in order for the deposit to be refunded.
If there is damage to the property or normal wear and tear that was done by the tenant, the landlord is entitled to use the funds from it to pay for any repair or cleaning necessary.
All monies taken from paying the security deposit must be documented by the landlord to the tenant upon the tenant’s leave.
Understanding the Terms of Security Deposits
A landlord requires a security deposit to ensure that the tenant who is renting the property or unit pays the rent on time and in full, and takes proper care of the property.
It is usually equal to the amount of 1 or 2 months’ rent, depending on the landlord’s preferences. It is held by the landlord until the end of the tenancy when it is returned to the tenant, provided there are no damages or unpaid rent.
Understanding the terms of paying the security deposit is key to having a stress-free renting experience.
Determining the amount of it, ensuring it’s held in an interest-bearing bank, and familiarizing yourself with the laws of your state will all help you avoid complications with reclaiming your deposit in the future.
DC, Washington has a number of particular regulations that regulate security deposits, how they function, and how they are eventually returned to ensure justice for both tenants and landlords.
To know more information about those laws and their impacts, visit https://www.nomadicrealestate.com/security-deposit-laws-washington-dc/.
Make a Smart Security Deposit Decision Now
To sum it up, security deposits are a set amount of money that is paid upfront when leasing a property or signing a contract.
It can also help protect the landlord in certain situations. Make sure to read the lease agreement and be sure to ask questions. Get receipts or proof of payment and inquire about the landlord’s policy for refunds.
Be wise with your security deposit and make sure it’s both legal and right for your situation.
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