Are you preparing to move out of your apartment and want to make sure you do everything possible to get your security deposit return? Are you signing your first lease and unclear what a security deposit even is, or how it affects you?
Security deposits are the surety provided to landlords, property management companies, and moving companies that offer them a financial safety net to fall back on should your plans change, for example. These deposits are an inevitable part of moving, and you will probably encounter them many times throughout your life. The good news is, security deposits are refundable, provided you meet certain requirements. Today, we will analyze security deposits, explain how they work, and teach you how to ensure your security deposit return.
WHAT IS A SECURITY DEPOSIT?
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A security deposit can best be described as a down-payment, typically given to a landlord or property management company above and beyond the regular rental charges. Landlords or property managers require security deposits as coverage for them in case of erratic tenants. Deposits also provide the incentive for renters to keep their end of the bargain. If you, as a tenant, were to miss your payments or wreak havoc on the state of your apartment, the landlord or management company has money from you as guaranteed financial coverage for such events.
This encourages renters to take care of the apartments they are living in, pay rent on time, and follow contractual obligations to the letter. If you were to breach your contract or cause damage to an apartment, not only could you lose any chance of enjoying a security deposit return, but you could be liable for hundreds of dollars worth of added reimbursement.
Security deposits serve a two-fold purpose in that they protect the landlord and compel the renter to honor the agreement. If you respect your rental contract, take good care of the premises, and follow any other obligations to the letter, it is likely that you can ensure a satisfactory security deposit return.
One other common type of security deposit is a moving company deposit. While these serve a somewhat different purpose than a rental security deposit, the underlying concept is the same. A moving deposit is intended to guarantee the moving company that you will not withdraw from your agreement with them in the 1eleventh hour and cause them a significant monetary loss.
Many moving companies require that you put down a security deposit to reserve and hold the date of your move. The sum of money charged is usually small, and you will enjoy the safe return of these funds if you either proceed with the move or cancel with enough advance notice.
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With a rental security deposit, you might wonder at what stage in the process you are to pay the sum and where the funds actually go. You are required to submit your security deposit along with the agreed-upon rent before taking up residency. In most cases, landlords or property managers will issue you a payment schedule that must be met before they will permit you to move in; this includes your security deposit. To ensure your deposit return and secure the apartment, you will need to make sure you pay your deposit on time.
When paying a security deposit to a property management company, U.S. state laws require most such entities to hold the funds in an interest-bearing bank account. Some states also allow property managers to provide receipts to new tenants that detail the bank account the funds are in and the prevailing annual rate of interest.
For your own peace of mind, realize that unless you fail to uphold your end of the rental agreement, landlords or property management companies are not permitted to spend that money. This means that if you are a responsible and reliable tenant, you will have a much higher chance of a positive security deposit return.
In the case of a moving company deposit, you will usually be required to pay the funds soon after reserving your move date. Moving companies are typically dealing with requests from a host of potential movers, so your deposit ensures that they are not wasting their time in adding you to the schedule.
TYPES OF SECURITY DEPOSIT:
HOW MUCH WILL YOU PAY?
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LANDLORD OR MANAGEMENT COMPANY SECURITY DEPOSITS
With a rental security deposit, the amount you pay depends on a few key factors, including the state in which you will reside and the apartment you will move into. Several states mandate a maximum security deposit amount; others leave it to the discretion of the landlord or property manager.
Whether you own pets also makes a difference in the security deposit you will end up paying. This differs based on state, but many times you will need to add an additional few weeks' rent to your security deposit for any potential damage that could be caused by your pet.
One final factor that makes a significant difference in the amount of the deposit you pay and the security deposit return you enjoy is your credit score. If your credit score is low, landlords and property managers will assess you as a high-risk renter. Many property managers require you to have a minimum credit score to rent one of their apartments, so be sure to check your credit before pursuing a property.
MOVING COMPANY SECURITY DEPOSITS
There is no set security deposit amount that moving companies charge across the board, but there are some key things to know when choosing a mover. Moving companies set their own policies for these funds and security deposit return.
If you are moving in a high-cost area, your deposit may be higher. If you are moving in peak season like the summer or on the weekend, you will typically pay a higher deposit. When moving cross-country, your security deposit will be more than if you were moving locally. Your security deposit will also depend on your total moving costs, which vary based on the number and weight of possessions you own, where you are moving to, the amount of labor required, etc. Most moving company security deposits fall anywhere from around $100 to $500.
KEY STEPS TO ENSURING YOUR
SECURITY DEPOSIT RETURN
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GETTING YOUR MOVING DEPOSIT BACK
To ensure that you receive a security deposit return from your moving company, you need to know that sudden cancellations affect both movers and other potential customers. Moving deposits are usually refundable if you give two weeks notice regarding a cancellation, and if you follow through with the actual move. If you are trying to reschedule your move, your deposit return might depend on whether the company can work you into their schedule again or not.
The terms and conditions surrounding the deposit returns for moving companies vary based on the entity. If you are considering moving companies for an upcoming relocation, be sure to ask about their security deposit policy so you can ensure that you do not have any unexpected losses down the line.
EXAMINE YOUR RENTAL AGREEMENT
The first step needed to ensure your safe security deposit return is to inspect your rental agreement. You should make sure you are following all the terms and conditions detailed in the agreement, and also that there are no surprise stipulations. If you do not have a copy of your rental agreement, make sure you get one. You need to know exactly what you are putting your name to and what all the document requires. For example, giving the required notice before vacating an apartment often affects your security deposit return.
If any part of your deposit is not refundable for some reason, this should be stipulated in the contract. Be aware that landlords are not allowed to keep security deposits unless they must be used for a valid purpose like overdue rent or damages.
Time is of the essence in ensuring your security deposit return. Again, give written notice if you are going to vacate the apartment, and do this in the time frame stipulated in the contract. Make sure you receive an official acknowledgment from the landlord or property management company as well. Overstaying could cost you some or all of your security deposit.
UPDATE YOUR ADDRESS
Another important step to ensure your security deposit return is to give your forwarding address to the landlord or property manager. Not only does this allow them to send any necessary documents, but this step is often contractually required. Clear communication between both parties will help you receive your deposit back.
CHECK WITH YOUR LANDLORD
Talk with your landlord or the property management company and ask for a comprehensive list of any requirements they have to ensure your security deposit return. Even if they do not have a specific policy, you will want to make sure that your apartment is properly and completely cleaned.
Dust your apartment, pack and move everything out so that nothing is left behind, and clean out any trash. You want to make sure that the landlord is notified ahead of time regard any items he will need to fix, so the burden does not fall on you and affect your security deposit return.
CONDUCT A FINAL WALK-THROUGH
Before moving out, another key element to ensuring your safe security deposit return is to conduct a final walk-through with your landlord. Landlords and property managers always complete a final inspection in between tenants, but it is a good idea to be there to ask or answer any questions.
Ensuring your security deposit return is a multi-faceted process. It starts with making sure you have read all the terms and regulations surrounding your agreement with a moving company, landlord, or property management firm. Ask questions and seek confirmation if you are unsure what the contractual obligations are.
If you will need to cancel or reschedule your move date, make sure you give the mover plenty of notice so you can receive your deposit back in full. When dealing with a landlord or property manager, follow the rental agreement to the letter, submit any necessary maintenance requests, take care of the property, and give notice and vacate in a timely fashion. By honoring your contract in full, you stand a positive chance of enjoying a comprehensive security deposit return.