Free Security Deposit Receipt Templates | Legal Guidelines

A Security Deposit Receipt is a document written by a landlord that records the security deposit payment made by a tenant.

The deposit receipt indicates the amount of money the tenant has paid as a security deposit for the duration of the lease.

What is a Security Deposit

A security deposit is an advanced payment made by a tenant to a landlord to ensure that the tenant will make all his/her rental payments and take care of other responsibilities as agreed in the terms of the lease.

The Security deposit is held by the landlord till the end of the lease. Suppose the tenant has violated certain terms of his/her lease agreement then the landlord can keep the security deposit as compensation. The circumstances that can warrant a landlord to retain the security deposit include property damage by the tenant, default in rent payment by the tenant, etc.

When is Security Deposit Collected

A security deposit should be collected by the landlord before the tenant moves into the property. A landlord that collects the security deposit after the tenant moves in risks catering for any damages caused to the property for the period the deposit remains unpaid.

The amount of money the tenant pays as a security deposit is often determined by state laws. The payment of the security deposit and the first month’s rent should be made at the time of signing the lease or prior to the tenant moving into the property.

Some states allow the tenant to make gradual payments within a specified period such as within the first three months of an individual’s tenancy. However, in most states, the security deposit must be fully paid before the tenant moves in. The landlord is often required to provide the tenant with a copy of the security deposit receipt or notice for effective record keeping.

Importance of Security Deposit Receipt

The security deposit receipt can play a very important role in ensuring the commitment of a tenant to move in and adhere to the terms of the lease. It is therefore important that the Landlord ensure that he/she writes a security deposit receipt.

The following points provide the importance of security deposit receipt:

Acts as proof of payment by a tenant

The deposit receipt is proof that the tenant has paid the security deposit. Issuing the deposit receipt will help resolve any conflict that may arise concerning the security deposit.

For rental management

The landlord can use the security deposit receipt as the tenant’s commitment to adhere to the lease terms.

Provides the landlord with legal protection

The security deposit protects the landlord from circumstances such as default in rental payment, property damage, etc. It ensures that should the lease terms be violated the landlord is guaranteed a financial cover. 

The amount of money the tenant pays as a security deposit is often determined by state laws. The payment of the security deposit and the first month’s rent should be made at the time of signing the lease or prior to the tenant moving into the property.

Some States allow the tenant to make gradual payments within a specified period such as within the first three months of an individual’s tenancy. However, in most states, the security deposit must be fully paid before the tenant moves in. The landlord is often required to provide the tenant with a copy of the security deposit receipt or notice for effective record keeping.

States That Legalize Issuing The Receipt

The necessity to issue a security deposit receipt is dependent upon the state. States that have legalized issuing a security deposit receipt require that a landlord adheres to their legislative laws. The landlord is required to inquire about the state laws regarding issuing a security deposit to ensure that it falls into the legal framework.

The following are states, their laws, and clauses regarding issuing a security deposit:

STATELAWSCLAUSE OF LAW
Florida§ 83.49According to Florida security deposit law, a landlord must write a security deposit receipt and ensure that he/she notifies the tenant in writing of the deposit receipt within 30 days.
Kentucky § 383.580(1)According to Kentucky State laws on a security deposit, a landlord must write a security deposit receipt after placing the money in a bank or lending institution. Afterward, the landlord must provide the tenant with a notice stating the bank’s name, the address, and the account number.
Maryland § 8–203According to Maryland Real Property, a landlord must write a security deposit receipt to a tenant as specified in § 8–203.1.
MassachusettsChapter 186, Section 15B(2)(c)According to Massachusetts State Laws, the Landlord is obligated to hold the security deposit in an interest-bearing account in a Massachusetts bank with the deposit receipt issued to the tenant for payment made within 30 days of the Landlord receiving the security deposit.
Michigan§ 554.603According to Michigan State Law, upon receiving the security deposit, a landlord must write a deposit receipt and provide the tenant with a notice along with an inventory checklist.
New HampshireRSA 540-A:6(I)(b)According to the New Hampshire state laws on the security deposit, the Landlord can request a security deposit of $100 or a month’s rent. The landlord must then issue the tenant with a security deposit receipt.
New York§ 7-103A New York landlord must store the tenant’s security deposit at a banking institution located within the state. Later, the security deposit receipt must be issued to the tenant by the landlord.
North Carolina§ 42-50In the North Carolina Tenant Security Deposit Act, a landlord should notify the tenant of the name, address, or banking institution that the security deposit is held 30 days after the lease begins.
Maine (city of Portland only)§ 30.01.087(B)(1)According to the city laws of Portland in the state of Maine, a landlord must write a deposit receipt for a security deposit held in an interest-bearing account and any interest earned at the tenant’s request for no more than once per year.
Washington D.C.§ 59.18.270According to Washington State Legislature, the Landlord must write a security deposit receipt upon collecting and depositing the money. The landlord must later issue the tenant with a written notice which must include the written receipt.

Writing a Security Deposit Receipt

A security deposit receipt must provide all the necessary information so as to be effective while also adhering to state laws. The Landlord should ensure that he/she follows the right procedure when writing the deposit receipt.

The landlord must therefore adhere to the following steps when writing a security deposit:

Date of the deposit

First, the landlord should state the day, month, and year the deposit is made. This is because a receipt is only issued upon payment by a tenant.

City details

The landlord should afterward consider indicating the name of the city. This is because laws requiring a written deposit receipt can apply in specific cities such as Portland in the state of Marine and not the entire state.

Depositor information

Secondly, the landlord should indicate the tenant’s name, social security number (SSN) in the security deposit receipt.

Bank details

Thirdly, a landlord should fill in all the bank information, including the name of the bank, its address, and the account number where the deposit is made. Most states that require a landlord to write a security deposit receipt demand that the banking institution holding the deposit be located within the state.

Terms of the lease

Next, a landlord should include information detailing the terms of the agreement of the security deposit. This information may include circumstances when the landlord will be entitled to keep the security deposit, such as damage to the property caused by the tenant. The landlord should also include the period that he/she requires to return the security deposit to the tenant once termination of the lease occurs.

Security deposit information

The landlord should, then, ensure that information concerning the security deposit includes the amount paid by the tenant. The amount paid depends on the state-imposed terms on a security deposit.

Signing off by the landlord

The landlord should finally end the security despite receipt with his or her signature affirming the information contained in the security deposit receipt. The landlord’s printed name and the date the receipt is signed should also be included.

Charging Security Deposit – Essential Considerations

Before charging a security deposit amount, a landlord should make certain considerations to ensure that the amount charged from the tenant is legally reasonable.

It is therefore important that the landlord consider the following factors before charging a security deposit:

State laws

Most state laws indicate the maximum amount of money a landlord can charge as a security deposit.  The landlord is expected to hold the deposit payment in a separate account from his/her private bank account. The deposit is held till the end of a tenant’s lease.

Monthly rent price

A property’s security deposit is dependant on the first month’s rent price. Often the security deposit is equivalent to the first month’s rent a tenant should pay. However, some states allow the landlord to charge a security deposit equivalent to two months’ rent.

The properties amenites

The landlord should also take into account the amenities of the property. Amenities such as elevators, pools, etc can be costly to repair when damaged. The landlord can factor this in addition to the initial cost of the first months’ rent when charging a security deposit.

Competition

A landlord who charges a higher security deposit than his/her competitors risks losing potential tenants. It is therefore recommended that the security deposit charged by a landlord is at the same rate as that of nearby properties.

Free Templates

Following are some free downloadable security deposit receipt templates for you:

Frequently Asked Questions

What is a security deposit in leasing?

The security deposit is a payment made to a landlord by a tenant to prove his/her intent to move in and take care of the property. The security deposit is kept by the landlord and returned to the tenant when the lease term comes to an end. If the tenant violates the lease’s specifically stipulated terms, the security deposit is kept by the landlord even upon termination of the lease.

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