Security Deposit as the Last Month of Rent

Security Deposit
Tenants should not pay the last month of rent with the security deposit.

At the beginning of every new tenancy, landlords and tenants are busy completing common steps. At a minimum, landlords and tenants have to sign leases, and tenants have to pay a security deposit and first month’s rent . Some landlords require the first and last month of rent which should not be confused with the security deposit. Each state has its own rental housing laws covering everything from tenants’ rights to handling security deposits. It is generally not advisable to have tenants use the deposit as the last month of rent.

Tenants pay the security deposit to the landlord at the beginning of tenancy. Generally it amounts to one to one and a half months of rent. After the tenant vacates the rental property, landlords will do a walk through to identify any damage beyond normal wear and tear. Landlords use the security deposit to cover the repairs of such damage. If there is no damage, then landlords return the security deposit to the tenant.

Landlords should clearly address the security deposit separate from rent payment in the rental property lease. Together, landlords and tenants should review the lease to eliminate any misunderstandings. If the landlord is using electronic signature software, like eSignToday, to sign the lease, then once signed, both parties will receive a signed copy for their records.