By Lauren Zumbach, Story by J.P. Morgan
With rents on the rise, some renters might be having a tougher time saving up for security deposits on top of initial rent and move-in costs. But reducing security deposits exposes property owners to additional risk. Here’s what to keep in mind if you’re asked for flexibility on a deposit.
How Large a Security Deposit Can a Property Owner Charge?
Security deposit laws vary by state, and cities can have their own rules, so it’s important to check regulations in your local area. Some states have no limits, while others may limit deposits to one to two months’ rent. Ann O’Connell, legal editor and attorney at Nolo, which has resources on security deposit laws, recommends property owners charge the largest security deposit the law or market conditions allow to reduce their risk if left with damage, or unpaid rent or fees at the end of a lease. If a property owner wants to reduce the up-front amount collected, they could consider dropping the last month’s rent requirement, because security deposits can be used to cover unpaid rent, O’Connell says.