A security deposit is a landlord’s monetary guarantee against property damage and early departure. Usually the security deposit amount is equivalent to one month or two months of rent. Most states place a cap on the amount that landlord’s can charge for a deposit. In the case of multiple tenants, all or one may pay the security deposit. It is up to the landlord whether or not to place all of the tenants on the lease, but most landlords include everyone. This protects the landlord in the case of damages. Everyone on the lease is equally responsible for fulfilling the terms of the lease. Most landlords and leasing agencies prefer to receive one check for the security deposit. This helps with the administrative accounting. When the security deposit is returned, it goes to the original payer. The tenants must then agree on how the deposit is split.
Renting out a home or an apartment may be a lucrative investment for a property owner, but being a landlord does require some administrative work. Unless landlords hire a management company, they will spend a portion of their time on collecting rents, deposits and maintaining the property. When multiple renters occupy a dwelling, the administrative part of a landlord’s duties increase. Multiple tenants on a lease can potentially lead to problems when someone decides to leave. Planning ahead and addressing these issues in the lease can provide a smoother transition when tenants leave.
Multiple Tenants and Security Deposits
Most states give a landlord a time period of up to 30 days in which to refund a security deposit. Many states require the landlord to keep the deposit in an interest bearing account separate from their personal funds. It is permissible for the landlord to keep a portion or all of the security deposit if there are damages to the residence. In the case of multiple renters, if one moves out the landlord may either refund the security deposit and collect a new deposit from the remaining tenants, or simply choose to refund when all tenants have moved out. The landlord will most likely address the issue of the security deposit and its disposition in the lease agreement.
Multiple tenants sometimes means multiple tensions and disagreements. If someone becomes upset and decides to leave, this can put everyone in a precarious predicament, especially if the rent becomes unaffordable because someone leaves. Having a roommate agreement can help resolve some of the money issues upfront. A roommate agreement is separate from the lease that the landlord gives to you. A roommate agreement is between the occupants of the home, and outlines how the rent will be paid, how the security deposit will be split, and how the household expenses are to be split. While this agreement is rather informal, having these conversations before problems arise will help in case someone does decide to leave. In many cases, a roommate agreement may state that the person moving forfeits his portion of the security deposit until everyone moves, or the departing roommate must find a replacement and collect a deposit from the replacement to get a refund.
Getting a Security Deposit Back
Even though landlord laws differ by state, they are consistent on the fact that security deposits are to be returned to the renter unless the lease agreement has been broken. To ensure the return of the security deposit, renters need to make sure that rent payments are up to date, the home is in good condition, and sufficient notice has been given before moving out. The rental agreement covers most of these items and renters should review the move-out checklist provided by the landlord when they give their notice. If the landlord does not provide a checklist, there are sample lists on the internet that can be downloaded.
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