Free Security Deposit Return Letter  Template

This Security Deposit Return Letter is a document that a Landlord can use when returning a security deposit to a former Tenant. Additionally, if the Landlord needs to make deductions from the deposit for issues such as damage to the property or lack of sufficient notice from the Tenant prior to vacating the property, the Landlord can use this letter to explain to the Tenant the basis of the deductions. In situations where Tenants upheld all terms of the lease agreement and no deductions were necessary, Tenants often use their Security Deposit Return Letter as a reference letter to help them rent other properties in the future. A clear and detailed Security Deposit Return Letter can be beneficial for both Landlords and Tenants.

The letter should include contact information for the tenant and the landlord in case there is a dispute. The address for the property should also be detailed. Information about the deposit can be listed. This should include the original amount of the deposit and the amount being returned to the tenant or of any balance due. The landlord should detail what the deductions are and why they were taken out of the full amount. The landlord will also need to sign the document.

Purpose of a Security Deposit Return Letter

Security deposit return letters are helpful for landlords and tenants alike. Since moving can be stressful—and you might not have time to talk to your tenant prior to the move—the safest way to handle the return of a security deposit is by sending them a security deposit return letter. These letters can be used to return the partial or full security deposit with an explanation of any deductions that have been applied.

Before sending the deposit, you will want to inspect the property and determine if there are any damages to the property that are outside normal wear and tear. Excessive damages or unpaid rent can be deducted from the security deposit. The security deposit return letter should provide a detailed account of all deductions that have been made to the original amount, if applicable. You will want to be fair and reasonable when making a deduction to the security deposit. If you are unable to justify the reason for a deduction, there is a possibility that the tenant(s) could object to them and argue their claim in court.

What if You Have No Forwarding Address?

You might not be able to get a forwarding address, maybe because your tenant knows they won’t be getting back a security deposit. You still need to send a letter explaining the reason.

If you have no forwarding address, mail the letter to the tenant’s last known address, which is your rental property. If you don’t do things by the book, your tenant could sue you for not following the security deposit rules for your state.

Refunding A Security Deposit

A. If there are no deductions. Refunding a security deposit in its entirety (and interest if applicable) is a straightforward matter. To comply with state laws, the landlord will need to return the security deposit to the tenant within their state’s established timeframe. This security deposit return letter should contain the following:

  1. Name and new address of the tenant(s), or the address provided for the return of the deposit
  2. The start date and end date of the lease
  3. The amount of the security deposit given by the tenant when they moved in
  4. The amount of interest accrued (if applicable)
  5. A check for the amount owed to the tenant
  6. The signature of the landlord and the date of signing

Once this letter has been written and given to the tenant, there are no further necessary steps for the landlord to make.

B. If there are deductions. When preparing a security deposit return letter that has deductions, the landlord should itemize any damages or deductions to the deposit in a financial statement and include it with the security deposit. Here are the key components to include when writing a security deposit return letter:

  1. Name and new address of the tenant(s), or the address provided for the return of the deposit
  2. The start date and end date of the lease
  3. The amount of the security deposit given by the tenant when they moved in
  4. The amount of interest accrued (if applicable)
  5. A financial statement that contains any legitimate deductions (cleaning costs, damages, repairs, unpaid rent, late fees, unpaid utilities, and other expenses)
  6. A brief explanation for each deduction (if applicable)
  7. Copies of repair or cleaning bills (if applicable)
  8. The total amount of deductions (if applicable)
  9. A check for the amount owed to the tenant or a request from the tenant to pay the amount due, including the date by which the payment should be made
  10. The signature of the landlord and the date of signing

To make sure that you are completing the letter correctly, check your state laws for compliance with the local requirements.

These resources are for informational purposes only and should not be construed as legal advice. Landlords and Tenants are encouraged to seek specific legal advice for any of the issues as found in this blog.

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