How Much a Landlord Can Charge for a Security Deposit
The amount that a landlord can charge for a security deposit is determined by state law. Some states have no limits, while others limit the amount to one or two times the monthly rent, and sometimes more if the unit is furnished or if the tenant has something that can cause serious damage to a unit, like a waterbed.
The security deposit generally includes all deposits the tenant pays at the start of the rental period except for the first month’s rent. This would include cleaning deposits or fees, key deposits, security deposits, pet deposits, last month’s rent, and any other deposits by whatever name. In some places prepaid rent is not considered part of the security deposit if it is specifically labeled as prepaid rent in a written agreement. Some states allow landlords and tenants to agree to prepaid rent for a short tenancy, such as a period of less than six months. Be sure to check the definition of security deposits in your state law and local ordinances.
In some states the landlord is required to give the tenant a written receipt for all deposits paid. This can be a lease or rental agreement or a written receipt. It is in the interest of both tenants and landlords to be clear what deposits have been paid, and it is always advisable to put the amount in writing.