Security Deposit Deductions: What Landlords Can (and Can't) Charge For
Returning a security deposit sounds simple until you're standing in a trashed apartment wondering what counts as "normal wear and tear." Get the deductions wrong and you could owe penalties. Here's how to do it right.
What you CAN deduct
- Unpaid rent — any balance owed at move-out
- Damage beyond normal wear and tear — holes in walls, broken fixtures, stained carpets (beyond age-related wear), burn marks, pet damage
- Cleaning costs — if the unit is left significantly dirtier than move-in condition (not just dusty — actually dirty)
- Unreturned keys or remotes — cost of replacement or rekeying
- Lease violation costs — unauthorized modifications, removal of fixtures, disposal of abandoned property (where state law allows)
What you CANNOT deduct
- Normal wear and tear — faded paint, worn carpet from foot traffic, minor scuffs on walls, loose door handles from age
- Pre-existing damage — anything documented in the move-in inspection
- Appliance depreciation — a 10-year-old dishwasher breaking is not the tenant's fault
- Routine maintenance — repainting between tenants, steam cleaning carpets (unless damage exceeds normal use), replacing air filters
- Improvements or upgrades — you can't charge the tenant for upgrades you wanted to make anyway
The gray area: wear and tear vs. damage
This is where most disputes happen. The legal standard is: would this condition have occurred through ordinary, reasonable use of the property? If yes, it's wear and tear. If no, it's damage.
- Small nail holes from hanging pictures
- Faded paint or wallpaper
- Carpet worn thin in high-traffic areas
- Minor scuffs on hardwood floors
- Loose grout in bathroom tile
- Large holes in walls or doors
- Crayon/marker on walls
- Carpet stains from spills or pets
- Gouges or burns in hardwood
- Broken tiles or fixtures
How to protect yourself: documentation
The single most important thing you can do is document the property condition at move-in and move-out. Photos, video, and a signed checklist make deductions defensible. Without documentation, a judge will almost always side with the tenant.
- Move-in inspection — walk through with the tenant, document every room, take timestamped photos, both parties sign
- Move-out inspection — same process, compare against move-in records
- Itemized deduction statement — most states require you to send this with the remaining deposit, listing each deduction with a dollar amount and description
- Keep receipts — for any repair or cleaning you deduct, keep the invoice or receipt
How Keywise helps with deposit deductions
Keywise tracks the deposit amount in each lease record and surfaces return deadlines based on your state. Move-in and move-out inspections are documented digitally with photos and condition ratings — giving you a side-by-side comparison when it's time to assess deductions.
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