What Can a Landlord Deduct from a Security Deposit?

A landlord must pay back all of the rental’s security deposit if the tenant fully complied with the terms of the lease and did not damage the unit. However, if the tenant damaged the unit or violated lease obligations, the landlord may be able to keep some, possibly all, of the deposit.

While every state has its law in regard to security deposits, and so both landlords and tenants should check the appropriate State laws to see how they affect their tenancy, there are general principals about the return of security deposits that apply everywhere.

Property Damage

Basically, the landlord expects that the unit be returned in substantially the same condition as when the tenant moved in. The lease is a contract, and any violation of its terms, including terms regarding the condition of the unit, can result in deposit deductions or taking the tenant to court.

The landlord may deduct the expense of repairing any damage done by the tenant, except for ordinary “wear and tear.” Wear and tear is the general wearing down of the apartment (e.g., the paint, the carpeting, the appliances) due to the passage of time or the ordinary, reasonable use made of facilities by people living there. A landlord cannot charge to replace carpeting that is frayed or discolored due to years of people walking on it or sunlight bleaching its colors. They cannot charge to replace a dishwasher after seven, eight, or more years of use, since dishwashers tend to not last longer than that.

Of course, not all damage is ordinary wear and tear. Red wine or pet urine stains on a carpet is not reasonable wear and tear—it’s because someone got sloppy with a glass or bottle, or didn’t housebreak their dog. Indelible marker or ink or finger paint stains on a wall from where the tenant’s children scribbled angels, shapes, houses, or a pet animal are not “wear and tear”—it’s a parent or caregiver failing to monitor a child. Dents or holes in walls left behind from moving furniture, throwing the laptop after a frustratingly unsuccessful update, or hanging pictures is not wear and tear. Cigarette burns on the floors or broken bathroom mirrors are not ordinary wear and tear. Damage caused by burns, spills, or blows which cause dents are not wear and tear. While there are clearly “grey areas” where some damage might be wear and tear or might not be, as a general rule, anything that exceeds the normal aging of surfaces, appliances, fixtures, etc. over time may be damage and deductible from the security deposit.

However, a landlord cannot simply say that “damage” is the tenant’s fault and withhold or retain the whole security deposit. The landlord must be able to specify and substantiate the damage: to explain exactly what damage was caused by the tenant, and exactly what it cost to repair. And the landlord can only retain the exact amount it cost to repair—not any more, and not anything for the landlord’s own time. If the landlord cannot detail and substantiate the amount(s) withheld (such as with invoices or receipts for repairs), then the landlord might lose in court should the tenant sue claiming that some or all of the deposit was wrongfully withheld.

Ordinary Wear and Tear

The converse of the landlord’s right to charge for damage is that they may not charge for ordinary or normal wear and tear, which is the amount of deterioration that could be expected when a unit is occupied by the number of people living there, for the length of time they lived there. This ordinary wear is the responsibility of the landlord—the cost of doing business and being a landlord.

There is no set standard for deciding what is not ordinary wear, but it is generally deterioration or damage exceeding that expected due to the passage of time. For example, the life of a carpet or paint job depends on the quality of the carpet or paint. Say that a high-quality paint job is expected to last five years, but a tenant who has occupied the unit for three years has damaged it to the point where it must be repainted. In this example, the tenant can be charged for 2/5 of the cost of new paint—that is, for the loss of two years from the paint’s expected lifespan. Similarly, if the tenant heavily smoked in the rooms, resulting in nicotine staining the walls and ceiling with a yellow color as well as tobacco residue on furniture or carpet, then the landlord may be able to recover the cost of repainting or professional steam cleaning—especially if the unit was a “no smoking” unit so that any cigarette smoke exceeded normal wear and tear. (If you are not allowed to do something, doing it is by definition not normal wear and tear.)

Unpaid Rent

The landlord can deduct any rent the tenant leaves owing from the security deposit at the end of the tenancy (i.e., when the tenant moves out). Furthermore, the landlord can deduct future rent—rent which the tenant would owe for additional months after they move out—if any. (Some leases have a “liquidated damages” or “early termination” clause which states that if the tenant moves out early, they owe a set amount of rent or “damages” for doing so. If there is such a clause, it is generally enforceable and the tenant will owe what that clause says he or she owes.)

If a tenant is a month-to-month tenant, if he or she fails to provide a month’s notice of moving, the landlord can take an extra month’s rent (an amount equal to the notice the tenant should have provided) from the security deposit. If a tenant has five months left to run on his or her lease but breaks the lease and leaves early, the landlord could take the lesser of five months or the amount of time it takes to actually re-rent the premises (e.g., if the landlord manages to re-rent in two months, the landlord can only take two months rent out from the deposit).

Cleaning

In some places a landlord may deduct for cleaning expenses if the tenant does not leave the unit clean. The usual standard is that the tenant must return the unit in as clean a condition as he or she received it (often called “broom clean”), except for ordinary wear and tear. The landlord can withhold enough of the deposit to pay the actual cost of cleaning the portions of the unit that do not meet this standard, such as the cost to hire a professional cleaning service. Or if the tenant leaves excessive belongings or debris behind, so much that the landlord must rent a dumpster to remove it, the landlord can deduct that cost.

Only Out-of-Pocket Costs

A landlord can only deduct amounts he or she paid to third parties for materials, labor, or services. Examples include the cost of paint, tile, carpet, or appliances; the cost of a painter to paint, or a carpenter, electrician, or plumber to make repairs; the cost of a clean-out service or dumpster; etc. What they can’t deduct is for their own time or the time of their employees (like maintenance persons or custodians). You can pretty much never deduct for your own time or labor (yes, there are exceptions, but this rule applies in well over 90% of situations), and you can’t deduct for costs (like employee wages or salary) you’d incur anyway.

Timeframe to Return Deposits

Most states require a landlord to return a deposit within a specified period of time: 30 days is very usual. There may be longer deadlines if the tenant disputes any deductions you have made. Check your state statutes to make sure the deposit is returned on time. The landlord also must return the interest earned on the deposit—that interest belongs to the tenant.

The Tenant’s Recourse

What can a tenant do if the landlord withheld more than required from the security deposit? A tenant can file a lawsuit (usually a small claims case) against the landlord alleging that the landlord withheld or deducted too much. If the landlord cannot substantiate the costs in court, or prove that all costs were ones he or she could deduct for (i.e., not wear and tear), the court can order the landlord to return the improperly withheld amount to the tenant. In many states, the tenant can also win additional damages (e.g., double the wrongfully withheld amount) or legal fees. It behooves landlords to not get greedy, and to only withhold what they legally can under state law.

For FAQ about Landlord/Tenant Law, visit the Free Advice website or ask a question about your landlord-tenant issue on our Free Advice Law Forum to see how others have handled similar situations.

Check out these related articles:

Security Deposits

How Much a Landlord Can Charge for a Security Deposit

How Security Deposits are Held

Getting Back Your Security Deposit

Inspection of the Premises

Tenants’ Privacy and Landlords’ Access

State Laws: Landlord/Tenant

Case Studies: Security Deposit Deductions

Case Study 1: Carpet Stains

John Anderson rented an apartment from Smith Property Management for three years. During his tenancy, he accidentally spilled red wine on the carpet, resulting in a noticeable stain. When John moved out, Smith Property Management deducted the cost of replacing the carpet from his security deposit. The deduction was justified because the damage went beyond ordinary wear and tear.

Case Study 2: Excessive Filth

Sarah Davis rented a house from Johnson Rentals for two years. Upon vacating the property, Sarah left behind excessive dirt, debris, and belongings, requiring professional cleaning and a dumpster rental to restore the property to its original condition. Johnson Rentals deducted the cleaning and dumpster costs from Sarah’s security deposit. This deduction was permissible as the tenant failed to leave the unit clean, exceeding ordinary wear and tear.

Case Study 3: Unpaid Rent

Michael Johnson, a month-to-month tenant, moved out of an apartment managed by Thompson Properties without providing the required one-month notice. As a result, Thompson Properties deducted an additional month’s rent from Michael’s security deposit. This deduction was within their rights as the tenant failed to fulfill the notice period as per the lease agreement.

Case Study 4: Damaged Walls

Emily Roberts rented an apartment from Adams Real Estate for four years. During her tenancy, Emily’s children often scribbled on the walls, causing indelible marker stains that required repainting. Adams Real Estate deducted the cost of repainting from Emily’s security deposit. This deduction was justified as the damage went beyond ordinary wear and tear and resulted from the tenant’s failure to monitor her children’s activities.

Case Study 5: Unauthorized Pet

Lisa Martinez, a tenant of Thompson Properties, brought a pet dog into her rental unit despite it being a “no pets” property. The dog caused damage, including chewed furniture and scratched floors. Thompson Properties deducted the necessary repairs from Lisa’s security deposit. This deduction was permissible since Lisa violated the lease agreement by having a pet in the unit.