Security deposits are usually not required in the law. However, rental properties no matter how big or small it is must ask tenants to cooperate by signing the security deposit agreement. There are some properties that will waive security deposit requirements. Although it is refundable, one of the purpose why landlords require security deposits because there might be problems with regards to the property or the unit in the future. It might be due to a damage or a failure to pay for the rent. A security deposit agreement must include the exact amount allocated, terms of storage, interest rate, and the terms by which the landlord will be permitted to keep the records or papers pertaining to the deposit. It should be able to specify the method or the process for having the money which will returned by the end of the tenancy.
What are security deposits? It is defined as something that serves as a guarantee so that the lessee will comply with the terms and conditions of the leased property. When it comes to most contracts, if the lessee turns out to violate any of the terms and conditions stated, the security deposit will be forfeited. There are some lease agreements that would give security deposits to which they cannot be used as rental payments. Aside from having a guarantee for compliance of the terms and conditions, it can also be used for unpaid bills like internet bills, electricity bills, water bills, and more. Also, it can be used to fix damages in the property.
10+ Security Deposit Agreement Samples
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The Basics of a Security Deposit Agreement
- Amount – your lease clause must be able to include the exact amount as your security deposit.
- Storing deposit – the lease clause should also include the terms with regards to the process on how you will be storing the security deposit of the tenant. Take note that there are some states that would allow you to hold the deposit in escrow. There are also some who don’t. It just depends.
- Interest rate – there are some states that will require you to keep the security deposits in a bank account to earn interest. In this case, you have to let your tenants know about this so that they will also be aware of the interest rate to which their security deposits will be held at.
- Keeping the deposit – the deposit agreement must include why you have the right to deduct money from their security deposits.
- Returning deposit – this includes the process that involves returning the security deposits to the tenants. You have a number of days to return the security deposits, but this still depends on the law of tenant move-out.
When will the security deposits be returned?
Security deposits will be returned after the end of the lease period by the time the lessee will vacate the property. There are some agreements that will provide a specific period intended for the return of security deposits. This is also to allow the lessor to inspect the unit to ensure that there are no damages or unpaid bills that can be used to deduct into the security deposit.
Can a security deposit be refunded?
Typically, if the unit or the property doesn’t have any damage at all or is still in a good condition, the security deposit can be refunded to them by the time the renter moves out.
How do you ask for your security deposit back?
You can send a letter or an email to your landlord requesting that he or she return your security deposit. You have to be polite when asking to the landlord and in informing that you have already vacated the property. Let him or her know that you appreciate the return of your deposits once he or she has completed with the property inspection and checking of paperwork.
If you want to see more samples and format, check out some security deposit agreement samples and templates provided in the article for your reference.
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