What Is a Security Deposit Letter?
A security deposit return letter is a form sent to the tenant, informing them of the refund of their security deposit. Send this letter at the end of the lease term and include information about deductions. Sending this return letter creates a record of the deposit amount, terms, and return date. It may also give the tenant a chance to dispute deductions or provide a forwarding address.
Legal Templates’s free security deposit return letter includes the information required. Use our forms to communicate with tenants and create proof of the return.
When Can a Landlord Keep the Security Deposit?
In some cases, a landlord may have the right to keep some or all of the security deposit. The most common reasons for legal deductions or withholdings include:
- Property damage: Costs for damages beyond normal wear and tear can be taken from the security deposit. Consult state laws for guidelines on deductions and providing itemized lists and receipts.
- Recovering unpaid rent: If the tenant has an outstanding rent balance, the landlord can recover the owed amount from the deposit.
- Cleaning costs: If the tenant’s negligence necessitates cleaning services, the landlord may deduct the costs from the deposit.
- Unauthorized alterations: If the tenant makes unapproved changes to the property, the landlord may deduct the cost to restore it to its original condition.
- Missing items: Landlords can deduct the costs to replace or repair missing or damaged items, such as light fixtures or appliances.
Check state and local security deposit laws for guidance on returning the deposit and itemizing deductions.
How to Write a Security Deposit Return Letter
Writing a security deposit return letter requires thorough information about deductions and refunds. Create an effective security deposit return letter with the following steps:
- Identify the landlord and tenant: Provide the full legal names of the landlord and tenant. Also, record the address for both parties and the landlord’s contact information.
- Note the deposit and interest amounts: Note the total amount paid as the original deposit. Include whether the deposit earned any interest, which will be given to the tenant.
- Itemize any deductions: Provide applicable deductions along with the reasons, costs, and receipts. Deductions may apply for repairs, cleaning, missing items, or unpaid bills.
- Define the refund method: Outline how the tenant will receive the refund of the deposit. Standard refund methods include cash, check, money order, electronic transfer, or credit card.
- Record the lease terms: Provide the initial start and end dates of the tenant’s lease. Also, note the lease address to show which agreement the refund applies to.
- Date the return letter: Review your letter and include the date. Dating it shows that the refund and deductions were completed within the required timeframe.
Common Security Deposit Return Letter Mistakes to Avoid
Your security deposit return letter can protect against disputes or legal consequences. Avoid the following mistakes to create a valid form:
- Returning the deposit late: State laws may require you to return deposits within a specific timeframe. Avoid returning the deposit late to ensure you don’t incur fees or forfeit your right to take deductions.
- Deducting normal wear and tear: The landlord should not deduct costs for normal wear and tear. This includes light carpet stains, faded paint, dirty blinds, and scuffed walls.
- Not meeting state laws: Follow state laws to make your return letter valid. Search for state and local regulations for deductions and withholding.
Security Deposit Return Letter Sample
Legal Templates’s free security deposit return letter displays the terms and formatting for a valid document. Use our customizable forms, available in PDF and Word format, to communicate with your tenants.
