Why Landlords Charge High Security Deposits
If you’re renting an apartment and you wonder why the landlord charges a high security deposit, it could be because they’ve been burned by inconsiderate tenants who trashed rental units, moved out in the middle of the night or perhaps left an awful mess in what is considered an important investment by the owner. Landlords don’t take too kindly to that, and often charge higher security deposits to cover the possibility of it happening again. However, this is not the only reason landlords charge higher security deposits.
The main reason a landlord may charge more is if a tenant throws up red flags to the landlord or property management company during the application process. These red flags may or may not be intentional, but can include:
- Not properly filling out or completing all of the application fields. Incomplete information on an application can come across to the landlord as the tenant might be hiding or avoiding something.
- Details are sketchy. If you’re not exactly sure of dates or how long you lived in your last rental property, don’t guess at it; be sure and accurate.
- The previous landlord references won’t divulge any information… good or bad.
- The tenant has already started off requesting renovations to the property or making demands for lower rents if they do the renovation work, when they haven’t even turned in their application yet. This is a sign that the tenant may not be able to afford the place.
This is all in addition to the obvious reasons of misrepresentation of facts, embellishments and other white lies, big and small. To some, this might seem like an automatic denial of a tenant’s rental application. However, when the market is tight, sometimes a landlord has to take a chance on a flawed application in order to get the property rented and get their vacancy rates down. To mitigate risks, the landlord will charge a high security deposit, in the chance that the red flags end up as real issues.
Whether or not a landlord has been burned or even if there are no red flag warnings coming from the tenant, there might be other reasons that a landlord will ask for a double security deposit. They may include:
- The landlord just remodeled the rental unit and they’d like to protect their investment.
- The tenant might have pets.
- Possibly the tenant hasn’t been on their job a long time, or they may be in a temporary status that is not secure employment.
- The landlord may have been burned by the previous tenant. This is a tough situation for the current/new tenant moving into the unit. It may not seem “fair” but the landlord has a right to do so.
Ultimately, the reasons for a high security deposit could be for nearly anything and the landlord doesn’t necessarily have to tell the tenant why they are charging more in most states. As a landlord, if you feel you have to explain, it can generally be summed up with reminding the tenant that the security deposit is fully refundable. As the tenant, you need to remember that as well. The deposit is refundable and all parties need to make sure that the lease states as such.
Both landlords and tenants should be familiar with their state’s landlord and tenant laws. It is typical that there is a cap on how much security deposit a landlord can charge or hold, such as no more than two month’s rent. There are also other important things to watch for in state or city laws, such as time frames that a landlord has in refunding a tenant’s security deposit or itemize damages withheld.
The bottom line is that with a security deposit, no matter how large or significant it may be, it is most likely refundable. As a tenant, do your part, take care of the unit, pay your rent, fulfill the terms of the lease and chances are you’ll get your money back.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.