Security Deposit: Everything You Need To Know
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You all heard about security deposits. However, a lot of people still get confused by it. A security deposit is a predetermined amount of money that must be paid before moving to the new apartment. Here’s everything you need to know about it.
Signing a lease to a new apartment is exciting, especially if this is your first time. So if you are a newbie in this field, this post will talk about some renter terms that you might not be familiar with, but you will come across them on this journey. Those are terms like fees, utilities, and deposits.
When you sign a rental lease, you will be asked to pay a specified amount of money upfront. This includes a security deposit, an administration fee, and some other potential fees for parking, storage, and in case you have a pet.
But what exactly do you pay with a security deposit? Make sure that you always know in detail what you are signing, before you put your signature on the paper. After reading this article you will learn everything you need to know about a security deposit, what it is, what it covers, how much it costs, the due date, and when it’s due back to you.
What Is It?
This is a fixed amount of money you need to pay to a landlord, that guarantees that you will pay rent and follow the lease rules. Think of it as some kind of insurance for the future.
Yes, it can cost you a few hundred dollars, but look at it from the bright side. Essentially landlord is doing you a favor, he is saving your money in case you damage the apartment or skip out on your rent. Remember that these deposits are always refundable!
What does it cover?
A landlord cannot cash a security deposit check for anything other than damages you made in the rental. After the landlord inspects the apartment, he will return the full amount or what’s left of it in case there were some damages.
How much it will cost you?
This mainly depends on which state are you living in. Some states do not have a limit on the amount that landlord can charge a tenant. The good news is that in New York City by the law a security deposit can be charged only in the amount of one month’s rent.
But how is a security deposit calculated? Landlords or property managers calculate the security deposit using these six factors:
- Current state law;
- The cost of your monthly rent;
- The quality of apartment amenities;
- Security deposits of competitors;
- Your rental application – credit score, criminal history, employment history, etc.
A few things from your rental application will affect the amount of a security deposit. If you have a lower credit score, a landlord may see you as someone who struggles and neglects his obligations. Also, if you don’t make three times the rent, a landlord might be raising the security deposit to offset the risk of losing money on a rental property.
The due date for the security deposit
Usually, security deposit is requested to be paid upfront. After you make a payment you will receive the keys. What I recommend is to do it at the lease signing. Also, you can pay deposit it in cash, with a cashier’s check, or through electronic payment.
When can you expect to get your security deposit back?
You should expect to get your deposit refunded anywhere from 30 to 60 days after your lease is up and you’ve moved out. You will receive it through the mail in the form of a check. This is why you need to make sure your old landlord knows your current address.
The landlord-tenant laws are different for different areas so consider doing thorough research before you move. You should know that you will be at an advantage when you learn every single detail about security deposits when renting a new place. That way, you will understand how a landlord can legally use or hold these funds, and make sure no one can scam you.
Now that you at least have an idea of what security deposits are and how they can help you, you can sign those papers without worries. After that you will for sure need assistance with your moving process, so why not help us handle that for you.
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