Does a Landlord Need to Return a Security Deposit if the Renter Defaults on the Lease?
Most landlords require a renter to pay a security deposit at the time a lease agreement is entered into by the parties. A security deposit is intended to cover damages suffered by the landlord in the event the renter defaults on the lease or fails to repair any actual damages when she vacates the property. Some states also allow a landlord to retain a security deposit for past due rent that remains unpaid after a tenant vacates the premises. If a renter defaults on the lease, the landlord likely will need to evict the tenant officially and then prove damages to a court to retain a security deposit legally.
Jurisdiction
In the United States, the Constitution provides the framework from which all laws must evolve. While the federal government is responsible for making numerous laws, state governments retain a great deal of sovereignty. State governments, for example, are responsible for enacting and enforcing landlord-tenant laws in the United States. Thus, there are noticeable differences among the laws and procedures.
Eviction Process
Before the issue of whether a landlord can keep your security deposit can be addressed, a landlord must officially file an eviction lawsuit against you in court for the default. You are notified of the lawsuit and allowed the opportunity to appear at a hearing to defend the lawsuit. If you do not appear, or have no legal defense, the court will order you to vacate the property.
Damage Hearing
After you have vacated the property, the court usually orders another hearing to determine what damages, if any, the landlord is entitled to as a result of your breach of the lease agreement. Typically, the landlord is required to notify you in writing of any alleged damages prior to the hearing. Damages can be past due rent or actual physical damages to the property. The court determines at the hearing what monetary damages the landlord is legally entitled to receive.
Security Deposit
State laws differ with regard to how a security deposit is handled when a tenant breaches a lease agreement. Some states allow a landlord to keep a security deposit for any type of damages caused by a tenant, while others permit a security deposit to be retained only for past due rent or actual physical damages. Often, your lease agreement itself states under what conditions your landlord may keep your security deposit. The court, however, will address the issue of your security deposit at the damages hearing and decide whether your landlord may keep some, or all, of it. If your landlord is allowed to keep it, you will be given credit for the amount of the deposit toward any monetary judgment entered against you for damages caused by your default.
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