Most landlords think of security deposits as simply a fixed lump sum of money collected upfront at the beginning of a lease agreement. Presumably, it is collected in order to protect the landlord from the financial repercussions of potential property damages discovered when the tenants vacate. And it (allegedly) sits undisturbed in an FDIC-insured escrow account for a year or more. WHY ARE SECURITY DEPOSITS SO MISUNDERSTOOD?
At first glance, a security deposit might seem like a very fixed concept. It is nothing more than its name describes – a deposit. And yet, more often than not, the security deposit itself is simply not enough to cover damages incurred. In most states, there is a limit as to how much of a security deposit a landlord is permitted to collect. But it’s usually the economic climate (and not the law) that dictates how much of a security deposit we ask of tenants. Even if our
state law permits us to collect the equivalent of two months of rent, is that something most families can realistically afford?
MORE OFTEN THAN NOT, THE SECURITY DEPOSIT ITSELF IS SIMPLY NOT ENOUGH TO COVER DAMAGES INCURRED.
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