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How Landlords May Use Security Deposits to Pay for Repairs: Learn About Your State’s Laws

Landlords Security Deposits

A security deposit is not a part of the monthly rent. It is a set amount of money a tenant has to pay at the start of a lease, and it is held by the landlord throughout the lease. The security deposit protects the landlord if the tenant violates the terms of the lease agreement. There are a number of state laws that apply to security deposits, such as how much tenants have to pay, how landlords should keep them, what landlords can use them for, and when they should return them. 

What amount do tenants have to pay as a security deposit?

Most landlords require a security deposit, and this is usually equal to one month’s rent. In some states, the deposit cannot be greater than a month’s rent. California’s civil code stipulates how much landlords can request for security deposits. 

Many states, such as Florida, Georgia, Idaho, Indiana and Colorado, have no limit on security deposits. Typically the security deposit is due when the lease is signed. Landlords using Property management services in Boulder can rely on them to get security deposits from tenants, keep them securely, use them for the right purposes, and return them within the required timeline. Evernest, Fowler, Colorado Group and Four Star Realty are some of the leading names in this regard.

Some landlords will ask tenants to pay the first month’s rent, the last month’s rent, and a security deposit. New tenants may think that they can use their security deposit as their last month’s rent, but this is not the case unless the landlord permits this. 

How should landlords keep a security deposit?

States have different rules about how to handle security deposits. Some states have no statutory guidelines about how a security deposit should be kept. Other states require that security deposits be deposited into a separate bank account with a federally insured financial institution. There are states that require landlords to place security deposits in escrow accounts. There are specific rules about who gets the interest on security deposits placed in separate accounts. 

Can landlords increase a security deposit? 

In month-to-month tenancies, security deposits can be increased in the same way as rent. Typically tenants should be given written notice 30 days in advance of any increase in a security deposit. Of course, where the state regulates the maximum security deposit amount, this cannot be exceeded when increasing the amount.  

Under what circumstances can landlords use a security deposit? 

How the landlord can use the security deposit is limited to the tenant’s responsibilities as spelled out in the lease agreement. 

Before or when a tenant moves in, the landlord and tenant should go through the property together to establish its condition. Some states require a “statement of condition” signed by the landlord and tenant. The security deposit cannot be used to repair any damage that already existed when the tenant moved in. 

Cost of cleaning: Tenants are required to leave units in the same condition of cleanliness as when they moved in. A landlord can use the security deposit to clean a unit when a tenant moves out without cleaning it. 

Property damages: If the property is damaged by the tenant or the tenant’s guests, the landlord can deduct the amount needed for repairs from the security deposit. The landlord must provide the tenant with a detailed list of the damages and repair costs. A landlord cannot use a security deposit for painting, replacing curtains, new carpets, etc., unless they are damaged beyond reasonable wear and tear. 

Unpaid rent: The landlord can use the security deposit for unpaid rent if the lease has ended and the tenant is delinquent. 

Other costs: Landlords can also use security deposits for other costs associated with violations of lease terms. 

How soon should landlords return a security deposit?

State laws dictate how soon security deposits must be repaid after a lease ends. For example, under Colorado law, a landlord has to return a tenant’s security deposit within one month. In some states, the security deposit must be returned as soon as within 14 days after the termination of tenancy.

If a landlord fails to return the security deposit within the specified time frame or fails to furnish the tenant with an itemized list of damages if deductions were made, the tenant can sue the landlord. Many states provide for damages double or even triple the amount of the security deposit withheld by a landlord.  


Landlords collect security deposits, so they ensure tenants take good care of a property and pay their rent. Different states have different laws regarding the security deposit amount, what kind of account funds are kept in, and how long landlords can hold a deposit after a tenant moves out. In all cases, it is important for landlords to understand their security deposit rights and responsibilities in terms of state law before signing a lease agreement. 

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