Am I Paying Too Much for a Security Deposit?

When it comes to an apartment security deposit, reasonable deposit amounts depend on a few factors. Ultimately, it is determined by the state and how effectively they regulate the security deposit maximum.

The Purpose of a Security Deposit

Before you ask the question of whether or not you are paying too much for an apartment security deposit, you need to understand what a security deposit is (and how it came about).

A security deposit is a good faith deposit made from you, the tenant, to the landlord to ensure that costs will be covered in the event there is damaged caused by you. This helps protect the landlord’s assets and property. If you want to receive your full security deposit back at the end of your stay, your apartment should be in the same condition it was in when you first moved in (normal wear and tear allowed).

It should be noted that a security deposit is not the same as an application fee or a pet deposit. If you have pets, you will more than likely be required to have an additional pet deposit. This takes care of damages that can be incurred by the pet. This is usually determined by the type and size of the animal.

Valid Reasons for a Higher Security Deposit

There are some instances where a higher security deposit is warranted. If you have any items that can cause potential  damage to an apartment rental, the security deposit can be raised. An example of an item that many rentals deem potentially damaging is a waterbed. This is due to the fact that waterbeds are filled with water and prone to popping. If it pops, water seeps out everywhere and causes water damage. This damage can occur to the carpet or other flooring (and possibly walls and baseboards). This is typically very expensive to fix, therefore demanding a higher security deposit is not uncommon.

Furnished apartments will usually have a higher security deposit because it takes into consideration the potential damage to the apartment and the furniture. The landlord has more to risk, and therefore want a larger deposit to cover increased potential damage.

A Typical Security Deposit

A typical security deposit will usually be about 1 to 2 times the amount of your monthly rent cost. At no point should the security deposit ever exceed more than 3 times the monthly rent.

When you give your security deposit, make sure you:

• Get a receipt for the exchange of money. This is especially important if you are paying cash.
• Get a check off list or a “walk through” list to show items that are already damaged when you move in. Make sure you and your landlord both have a signed copy.

Doing the above will protect you if the landlord tries to keep your security deposit (for previous damages that was not created by you).