Security deposits are one of the thornier problems a landlord has to face when dealing with former tenants, but by making sure you cover yourself, you can avoid a lot of the hassle when they move out. The problem is that many landlords are unknowledgeable about when they should keep the deposit, which puts them legal risk:  the penalty for wrongfully withholding a security deposit can amount to three times the amount of the deposit, should the court rule against you.

The following is a list of reasons when a landlord may withhold a security deposit.

• Non-payment of rent. Usually ends up in eviction court and you will be able to keep the deposit.
• Sometimes the tenant leaves or must leave the premises before the lease is up (to take a job in a different city for instance). This is not strictly non-payment of rent, but it does leave the landlord in a lurch. In these cases the landlord must make an honest effort to rent the apartment, otherwise he or she must pay rent on the apartment until the property is re-rented.
• Cleaning of the apartment. You should stipulate in the lease whether the tenant must clean the apartment to rental state.
• Damages to the property. This is the one that causes slip ups. The tenant does not have pay for normal wear and tear on the apartment, but almost inevitably the tenant and landlord will differ on what constitutes normal wear and tear and what constitutes damage. What you call a gouge on a wood floor the tenant considers a scuff. What you call a torn carpet they will say is an old carpet that was falling apart.  Unfortunately the law is not clear cut on some of these matters.

The landlord must indicate why he has kept the security, so you’d be advised to have all the paperwork. Before the tenant moves is, walk through the apartment with him and list any preexisting damages, and make a copy for both of you.

When the tenant moves out, you are required as a landlord to send the them an itemized list of damages and their deposit check (minus repairs) to their last known address, so be sure to get the tenant’s new address. Barring that, encourage the tenant to put in for a change of address at the post office so the check doesn’t get lost. It’ll save you a lot of headaches.