Why is it important to require a security deposit from a subtenant?

A security deposit is a landlord’s insurance against property damage that a tenant may cause. The tenant pays this deposit in advance and the landlord retains it until the tenant moves out. At this time the property is inspected and, if there has been no damage, the deposit is returned to the tenant. If there is damage, the landlord retains part or all of the deposit to offset repair costs. In many cases, the amount of the deposit is one month’s rent, but it may be higher or lower depending on the circumstances.

Requiring a security deposit when subletting a property can be extremely important. Without one, the landlord does not have an easy recourse if property damage is inflicted. Of course, legal action is always available, but the easiest method is to simply request a suitable deposit in advance. By doing this, you can protect yourself against any damage the tenant may leave behind. You will not have to ask the tenant for the money from then on, you will already be holding it as security.

Before taking a security deposit, the landlord and potential tenant must view the property together and come to an agreement on the initial condition of the rental unit. If there are pre-existing circumstances regarding the property, these should be carefully noted in the rental agreement. The landlord must have photographs taken before subletting the property as proof of its initial condition. When the tenant moves out, this process should be repeated so there is no question about how the property’s initial condition compares to its final condition.

When deciding on a security deposit for a property, it is important to consider legal restrictions. Laws regarding security deposits vary by state, so it is important to understand these restrictions and regulations. There may be requirements as to the account where the landlord must keep the security deposit. The landlord may also be required to repay any accrued interest on the deposit amount together with the deposit at the end of the rental agreement. These restrictions on security deposits can even vary by municipality, so it’s important to understand local and state laws.