Contract Glossary
Security Deposit
Definition
Money paid upfront by a tenant to a landlord as protection against property damage, unpaid rent, or lease violations. The landlord holds the deposit during the lease and must return it — minus legitimate deductions — after the tenant moves out. Every state has specific rules about maximum amounts, holding requirements, and return deadlines.
In Practice
You rent an apartment and pay a $2,400 security deposit (one month's rent). After living there for two years, you move out and leave the unit in good condition with normal wear. The landlord deducts $800 for 'carpet cleaning and repainting.' In most states, normal wear and tear is not a valid deduction — carpets wearing down and paint fading from sunlight are expected after two years of occupancy. If the landlord doesn't return your deposit within the state deadline (often 14–30 days), you may be entitled to double or triple the deposit as a penalty.
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Frequently asked questions about security deposit
It varies by state and whether the unit is residential or commercial. Many states cap residential deposits at 1–2 months' rent. California limits it to 2 months' rent for unfurnished units and 3 months for furnished. Commercial leases typically have no cap — 3–6 months' rent is common for businesses without established credit. Some cities have additional local limits.
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Create your contractThis content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.