WHEN SECURITY DEPOSITS DON’T COVER THE LOSS Security deposits have always been the default safety net for landlords. Collect the deposit, hold it during the lease, and use it if something goes wrong. Simple in theory, but in practice, deposits don’t always cover the real risk. Unpaid rent, significant damage, and legal costs can easily exceed what you’re holding. At the same time, higher deposits can price out otherwise qualified renters or slow down leasing. That dilemma has caused many landlords to look at alternative ways to protect their property without losing good applicants. Understanding your options starts with knowing how deposits work, what the law allows, and where they fall short.
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