Renting an apartment means taking care of several tasks and conducting research on many factors. Before you sign on any dotted lines, take time to review an apartment lease carefully and make sure there is nothing objectionable in it.

Of all the clauses listed in a lease agreement, the tenant’s security deposit and monthly rent are among the most major clauses of interest. The landlord or property manager may ask for the first and last month’s rent upfront as well, but you can usually get the security deposit back after passing the move-out inspection. When tenants move into apartments in Farmington Hills, MI, that money can then work as the down payment or a fresh security deposit.

Before we go on, let’s see what security deposits actually entail:

What are Security Deposits?

Security deposits are the fixed amount that a tenant pays upfront before moving in. It is usually understood that the security deposit is in lieu of any damage a tenant might inflict upon the apartment. Other than normal wear and tear, the rental unit should be returned to the property manager in the same condition as the move-in point. In these cases, the tenant will get the deposit money back whenever they choose not to renew their rental agreement.

Why We May Not Get All or Part of our Security Deposit Back

The general rule is that if the rental unit is not in a reasonable condition (minus normal wear and tear) when a tenant moves out, they should get their security deposit back. Below is an itemized list of several situations where tenants may not get part or all of their security deposits back:

●        If there is any unpaid rent left on the part of the tenant – whether this is a few months rent or a lesser amount

●        If the rental property has suffered any major or even minor damage outside of normal wear and tear during the stay of the tenant

Some More Reasons

●        There are some unpaid utilities that the tenant was responsible for instead of the property management company

●        The tenant breaks any rules of the lease agreement

●        The tenant has not paid the first month’s rent, last month’s rent, or other dues in a timely manner

●        Any other legal issue, such as leaking sensitive or confidential information

●        Any damage caused by guests, pets (service animals or not), or any person other than the tenant

To be on the safe side, make sure that you know how to get that security deposit back. If necessary, seek out legal or financial advice so that your security deposit is not compromised.

How Much is a Security Deposit for Renting an Apartment?

If you are planning to move into an apartment soon, it is wise to calculate your anticipated costs. You can start by looking up what to expect in apartment move-in fees. For the security deposit, however, you may have to specifically enquire and make sure of the unique terms.

The Usual Amount for Security Deposits

The average security deposit in most regions is equal to around one month’s rent. Some state laws may allow property management companies or anyone with property ownership to set a higher security deposit. Instead of one month’s rent, the security deposit might be equal to a few months’ rent pay.

You may ask, “Can the security deposit be less than a month’s rent?” The answer is, “it depends.”

There are certain low-income tax credit properties that offer lower security deposits if your credit history is good. If we are talking about a market-rate complex, the security deposit might be lowered as an additional incentive for more tenants to move-in.

When to Expect the Security Deposit Back

If there is no major damage or maintenance to pay for in the apartment, the previous tenant should get their security deposit back within 30 days or so. The same goes for any partial refund that is due to the tenant. You might want to keep a separate bank account just for the purpose of refunds in an effort to keep things straight.

The exact time for the security deposit return will depend on various factors. To make sure that your previous landlord can easily send you the security deposit amount, leave your forwarding address with them. Also, check the local and state laws for what to expect and everything you need to know about security deposit law. If necessary, tenants should know if they need to take anyone to small claims court.

Ensuring that You Get Your Security Deposit Back

Here are some ways to ensure that you get that deposit back when it is time to move on:

• Take photos of the apartment on the move-in day and the initial tour
• If there is any damage, take steps to repair it right away
• Stay ahead of maintenance issues with regular upgrades and tune-ups
• Go for professional cleaning services from time to time, showing the receipts when you move out (especially if this was required in the lease)
• Follow the required move-out process and deliver a Notice of Intent to Vacate in a timely manner
• Replace broken blinds and fix other minor issues
• Document all that you do to prove your efforts in the apartment

Factors to Consider While Calculating Your Security Deposit

Before you decide to pay rent on an apartment, consider how the property manager or landlord will calculate the security deposits in your area.  These factors include the following:

• The local legislations and state laws
• The amenities in the rental unit – these may include an in-unit washer/dryer, furnishings, doormen, renovations, trash pickup services, elevators, etc.
• Whether the apartment is furnished or not
• Whether the tenant has a pet (there might be a separate account for pets in most apartment complexes, with their own fees and apartment pet policy)
• The monthly rental rates at the time
• The average security deposit of similar properties within the same area
• The credit history of the tenant (if it is a poor one, they might have to pay a higher security deposit)

When Do You Have to Pay the Security Deposit?

According to the usual expectations, you should pay the security deposit in full before signing the rental agreement. This transaction is preferable (for the landlord or property manager) before the tenant gets the keys to the apartment.

The usual accepted modes of security deposit payment include cash, certified funds, money orders, cashier checks, etc. Before signing, read the contract carefully and ensure that you are willing and able to pay all mentioned fees. You may have to go to a financial institution for this purpose, so start lining up your finances before committing to such major payments.

What if You Don’t Get the Security Deposit Back?

If you have given the landlord a relevant forwarding address and any other necessary details, you should receive a security deposit refund in some time. If the deposit does not get to you in the agreed-upon period or doesn’t give the security deposit back at all, There typically is a breakdown of charges that were deducted. If there isn’t, call up your previous landlord and ask for an explanation.

There could be a reason for the delay, so give it some time if possible. You may have to follow up with a written letter or email. Make sure to keep that e-mail and make copies of the letter so that you also have some documentation on record.

Making Sure of the Amount in Writing

Speaking of documentation, the tenant and landlord should also make sure that the security deposit amount is written out in black and white. The dollar amount should ideally be included in the lease agreement itself.

In case it is not, or the terms of the security deposit are vague, one of the parties could be at risk of financial loss. The tenant might skip the security deposit altogether or the landlord might keep it without reason. They might also claim a smaller or larger amount, which could further lead to conflict. With proper documentation, it will be possible to prove what everyone agreed upon.

Security deposits are usually not considered to be the last month’s rent or any other kind of fee. A tenant cannot legally ask the landlord to use the security deposit to cover any rent payment – whether it is full or prorated.

The Takeaway

With the housing market the way it is now, many people are asking “Should I sell my house and rent an apartment?” Before they answer that question, they need to take a lot of factors into account. One of the most important ones is the security deposit and the terms related to it. If you can manage to retain that deposit, it can really come in handy when you want to invest in a house again.

At the end of the day, everyone’s situation is different. A high security deposit might not be a problem for some people, but it could mean a major difference for people with kids, pets, or certain habits like smoking, partying, etc.