When You Can Deduct From Security Deposits – By: Tabitha Elligan

A security deposit is an amount of money that a resident pays to a landlord upon entering into a written Lease agreement. The purpose of a security deposit is intended to protect the landlord if the resident violates any terms of their Lease. If the resident fulfills the terms of the Lease, the landlord must return the security deposit in its entirety. Even though the deposit is being held by the landlord or its agent, the funds remain the property of the resident which the landlord is holding in trust. Landlords should provide in the Lease the name and physical address of the banking institution in which the deposit is held. Here are a few examples of how a resident can violate their Lease causing the landlord to deduct from their security deposit:

• Damage To The Property

While the landlord expects normal wear and tear to the property, damage to the property exceeding normal wear and tear will cause the landlord to deduct from the security deposit. Examples of damages warranting a deduction in the deposit include but are not limited to, stains on the carpet, holes in the walls, broken windows, burns on the countertops, broken toilets, and unauthorized painting. Whether the aforementioned damage is a result of unreasonable use, abuse, intentional acts, or accidental, if it is caused by the resident, the landlord can and will deduct from the security deposit.

• Unpaid Rent and Breaking The Lease

If a resident vacates the property without full payment of the rent, the landlord can deduct from the security deposit. In addition, if a resident has their right to possession terminated due to breach of the Lease, the landlord can deduct from the security deposit. While most of these terms will be found in the Lease agreement, it is important to note that just because a landlord can deduct unpaid rent from a security deposit – it does not mean that a resident can use their security deposit to cover their unpaid rent. Rent must still be paid in full.

It is extremely important to understand your rights as a landlord. Understanding these rights include learning when the landlord can and will deduct from the security deposit. Our advice to you would be to keep a good record of the condition the property before the Lease is signed and after the Lease is terminated. We hope to share more tips on security deposits in a future blog post.

Georgia

• O.C.G.A. § 44-7-30 to 44-7-37 
• https://law.justia.com/codes/georgia/2010/title-44/chapter-7/article-2/

North Carolina

• N.C. Gen. Stat. § 42-50 to 42-56
• https://law.justia.com/codes/north-carolina/2014/chapter-42/article-6/

South Carolina

• S.C. Code Ann. § 27-40-410
• https://law.justia.com/codes/south-carolina/2012/title-27/chapter-40/section-27-40-410/