What Can I Deduct from a Security Deposit?

In any matter of property management, ownership, or throughout the course of being a landlord, there may be no topic as contentious and beef-inspiring than the handling and forfeiture of deposits. It’s a topic we’ve covered in moderate depth before, and one we’ll likely visit routinely. For now let’s focus on what might actually be the most difficult part of the whole thing: knowing what can be deducted from a deposit.

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Valid Security Deposit Deductions in Arizona

Of course many laws vary from state to state, but for the most part what can be deducted stays fairly static across the board. There’s always complete forfeiture of a deposit, as is the case when an equivalent or greater amount of rent is left due at the time of the tenant’s departure. But when we’re talking deductions specifically we’re nearly always referring to damages.

Damages are the most common, and frequently most valid, deductions. These are loosely defined as any form of damage that goes beyond routine wear and tear. Keep in mind that the presence of these does not entitle you to the full amount of the deposit—only the amount required to make repairs.

Common damages include:

  • Damage caused due to negligence. Typically appliance maintenance falls under the number of things that a landlord or property manager is meant to handle. However if damage is caused to to wilful misuse or obvious negligence, the cost of repairs can be deducted.
  • Flooring damages. This includes carpet burns, cracked wood flooring/stripped wood flooring, obvious pet damage including stains.
  • More than regular damage to walls. This would be excessive pin or nail holes that need to be patched, wall cracks, paint removal, and similar forms of excessive damage.
  • Extensive damage to furniture. This includes cigarette burns, stains, broken furniture and appliances, etc.

Do keep in mind that normal wear and tear is to be expected. A tenant has been living in your property for a while, so things like fading paint and blinds, normal amounts of dirt, bulb replacement, appliance maintenance, and similar property needs cannot be deducted. These are the responsibility of you and your property management team.

Avoiding Security Deposit (& Property) Stress

The best way to avoid the stress of a deposit is to ensure you do a complete walk through with new and prospective tenants. Pictures can help, as well as a full itemized list of appliances and features including a note on their current condition at the time of signing the lease.

Additionally be sure to notify the tenant of all deductions, and for better measure be sure to include an itemized list of all deductions. They might attempt to contest these, but the more thorough and specific you are the better the chances of you avoiding any hot water or trouble.

Looking for a better, less stressful way of maintaining and handling your property and tenant needs? Contact Southwest Mountain Realty today to ask about our extensive property management services in Phoenix Metro!