A security deposit, sometimes called a damage deposit, is some amount a tenant may be required to pay a landlord at the beginning of the lease. The purpose of a security deposit is to protect the landlord in the event of default or at the end of the lease to fix any damage to the rental unit. The remaining amount of a security deposit should be returned to the tenant.
If a landlord does not return your security deposit, or they do not give you a written account of why they are withholding your security deposit, it may be possible to sue them to recover it. Many states have statutes that allow a tenant to sue a landlord in this situation. Such statutes are called Wrongful Withholding of Security Deposit, or Wrongful Retention of Security Deposit. In any event, you may be able to sue your landlord when you move out for the security deposit you are owed.
Each state is different, but most allow a tenant whose security deposit has been wrongfully withheld to recover two or three times the amount wrongfully withheld. Some states also allow the tenant to recover penalties, damages, and attorney’s fees.
For example, suppose Tenant A has moved out of his apartment, but Landlord X was holding Tenant A’s $1,000 security deposit. If Tenant A caused $200 worth of damage to the apartment, he or she should get $800 back from Landlord X. If Landlord X refuses to give the $800 back, Tenant A can sue for wrongful withholding of a security deposit, and potentially get $1,600, $2,400, or more from Landlord X.
Depending on the state, a landlord does have some defenses to a lawsuit for the wrongful withholding of a security deposit. These include:
- A good-faith reason for keeping the security deposit
- Not acting willfully when keeping the security deposit
In some states, the failure of a tenant to give written notice to the landlord of their intent to sue for the wrongful withholding of their security deposit.
If you think that your security deposit has been wrongfully withheld by a landlord, or you are a landlord who is being sued for wrongfully withholding a tenant’s security deposit, it is highly recommended that you contact a landlord and tenant attorney. Only a real estate attorney will be able to answer your questions and help defend your rights.