Security Deposit Return Letter

Security Deposit Return Letter

When a tenant wishes to move into a rental unit, the landlord will usually collect a security deposit. This is usually an amount equal to or slightly more than a month’s rent and protects the landlord from any losses they might incur due to the tenant. If the tenant wishes to move out or their lease ends, the landlord must refund the security deposit, sometimes keeping a portion as compensation for unpaid rent or property damage. The return is recorded in a Security Deposit Return Letter.

What Is a Security Deposit Return Letter?

The security deposit return letter is a formal document prepared by a landlord at the end of a lease period to record the return of a security deposit amount to a tenant. The laws in a state will usually provide a timeline within which this letter and an accompanying check must be sent to an address provided by the tenant. Usually, the return amount is the security deposit collected at the beginning of the lease, plus collected interest, and minus unpaid rent or damages, as applicable.

Security Deposit Return Letter (Word Template)



    What Can a Landlord Deduct from a Security Deposit?

    Many states define the conditions under which a landlord can withhold part or all of a tenant’s security deposit. For extra protection, most landlords will even include a withholding clause in the lease agreement. While the reasons will vary, here are some factors that could merit a deduction:

    • Unpaid utilities
    • Unpaid rent
    • Damage to the property exceeding normal wear and tear
    • Property damage
    • Removal of abandoned possessions
    • Early lease termination penalty

    Normal Wear and Tear

    Generally, a landlord cannot deduct a tenant’s security deposit for damage that is considered normal wear and tear. These are damages that result from daily use and include:

    • Age, moisture, or temperature-related warping of floorboard or doors
    • Wallpaper or paid fading caused by sunlight
    • Nail holes in the walls that are not excessive
    • Lightly scuffed walls that only require cleaning
    • Broken plumbing resulting from normal use
    • Carpet wear or stains caused by everyday use
    • Dirty curtains or blinds
    • Broken lightbulbs
    • Broken hardware or appliances that were old

    How to Write

    Generally, the amount of time you have to return a security deposit to a tenant will depend on your state’s laws. Timelines tend to vary from several weeks to over a month, with the countdown beginning when the tenant moves out of the property. Once you figure out how long you have, get right to drafting a Security Deposit Return Letter through the following steps:

    Step 1: Supply Standard Details

    Indicate the current date at the top of the page, followed by the tenant’s full name and the address they provided when they moved out of the premises. You should also identify the premises for which the security deposit was paid by supplying the address and apartment number, where applicable.

    Step 2: Indicate the Deposit Amount

    Next, write down the original security deposit amount and the lease dates, as they appear on the lease agreement. Because most states require that you put this amount in an interest-bearing account, you will also need to mention the interest it accrued and the resulting total.

    Step 3: Outline the Rent Payments

    Indicate the rent dates for the original lease, including the start and end dates after the phrases ‘Rent Due from’ and ‘Last Rent Date.’ Calculate the total rent paid by the tenant during this lease period and note the amount below the lease dates.

    Step 4: Mention Any Outstanding Payments

    Now, mention any payments or bills that are currently outstanding for the tenant. For example, you can note down any rent arrears, their due dates, and any late fees accompanying them. You should also mention any damages the tenant caused on the property for which you will be making deductions. Create an itemized list of all these payments so you can easily deduct them from the security deposit.

    Under the phrase ‘Balance Due to Owner,’ indicate the total amount for all these payments. This is the figure that will be deducted from the deposit to obtain a balance.

    Step 5: Supply the Payment Details

    Now that you have informed the tenant of the payments they owe you for late fees or property damage, you should provide them with an address where they can send the payment. You can also supply them with a timeline for the payment.

    Step 6: Sign the Letter

    Finally, indicate your full name and sign the letter to improve its authenticity. It is also advisable to use a page with your landlord or property manager’s letterhead.

    Sample — Letter to Return the Security Deposit

    2 August 2031

    Owen Henrik

    122 Union Road

    Montgomery, AL 10203

    Re: Security Deposit Return

    Dear Mr. Henrik,

    I am writing about your security deposit of $4,500 for the property located at 300 Grace Park, Montgomery, AL, and the lease period 20 May 2030 to 20 July 2030. I have attached a check for the full amount. It was an honor to have you as a tenant.

    All the best in the future.

    Sincerely,

    Phelicia Park

    Sample — Letter of Security Deposit Partial Refund

    2 August 2031

    Cheryl Marcel

    656 Tristan Avenue

    Denver, CO 09123

    Re: Security Deposit Return

    Dear Ms. Marcel,

    I am writing with regard to your security deposit amount of $9,500 for the property located at 510 Honey Street, Denver, CO 12090 and the lease period 1 January 2031 to 1 July 2031. I am deducting $2,000 from this amount to cover the following:

    Rent arrears – $1,200

    Late fees – $300

    Broken front door – $300

    Carpet replacement – $200

    I have attached a check for the remaining balance of $7,500 and a list of the bills for these deductions. Contact me if you have any questions.

    Sincerely,

    Julian Bakeman

    Note: You should attach a check for the partial amount and receipts or bills that justify the deducted amount for damages.

    Sample — Not Refunding the Security Deposit Letter

    2 August 2031

    Rebecca Baldwin

    400 Fresco Road

    Chicago , IL 47994

    Re: Security Deposit Return

    Dear Ms. Baldwin,

    This is concerning your security deposit of $6,000 for the premises located at 687 Wonder Street, Chicago, IL 30810, and the lease starting 2 February 2031 to 2 July 2031. I will not be returning this amount and will keep it to cover the following:

    Unpaid rent (2 months) – $5,000

    Late fees – $1,000

    I have attached the late rent notices for these outstanding amounts. Feel free to contact me if you have any questions regarding this matter.

    Sincerely,

    Elena Right

    Note: You can only withhold all of a tenant’s security deposit if the amount they owe you is equal to or more than the deposit. You will need to attach bills, receipts, and invoices.

    Sample — Not Refunding Security Deposit with Request for Payment Letter

    2 August 2031

    Peter Sanders

    700 Robert Road

    Portland, ME 11090

    Re: Security Deposit Return

    Dear Mr. Sanders,

    This is concerning your security deposit of $4,000 for the premises located at 431 Main Street, Chicago, IL 12010, and the lease starting 1 March 2031 to 1 July 2031. I will not be returning this amount and will keep it to cover the following:

    Unpaid rent – $4,000

    Late fees – $700

    Broken windows – $ 500

    Damaged garage door – $200

    These damages amount to $5,500. Because this amount exceeds your security deposit, you now owe me $1,500, payable immediately to the following address:

    Isabel Meyers, 431 Main Street, Chicago, IL 12010

    Sincerely,

    Isabel Meyers

    Tip: You have the option of filing a claim in small claims court if the tenant fails to send the outstanding amount.

    Frequently Asked Questions

    What can I do if I don’t get my deposit back?

    If your landlord doesn’t refund your security deposit within the state-allotted timeline, you can send them a seven-day notice. If they still do not send you a check, you should hire an attorney or sue the landlord in Small Claims Court.

    Are broken blinds considered normal wear and tear?

    Normal wear and tear covers damages that would have happened over time regardless of your activities. Broken or missing blinds, windows, or window screens don’t fall in this category.

    Can a landlord charge for painting after you move out of California?

    California landlord-tenant guidelines stipulate that painted walls have a 2 to 3-year useful life. If you are a long-term tenant (past 3 years), you cannot be charged for paint damage caused by normal wear and tear. However, you can be billed for damage you cause to the walls that requires repainting.

    What is the maximum security deposit a landlord can charge in California?

    Landlords in California can only charge a maximum of two month’s rent for an unfurnished rental unit and three months’ rent for a furnished unit as security deposit.

    Conclusion

    The collection and refund of rental security deposits is a sensitive matter that is usually regulated by state laws. Once a tenant vacates your property, you must send them a Security Deposit Return Letter along with a check for their full deposit or a portion. If you send a portion, you must explain in the letter why you have made deductions. Remember, mishandling this process could lead to legal repercussions, so you must do everything by the book.

    Related Posts