Security Deposit Deductions: What Landlords Can Charge

Normal Wear and Tear vs Tenant Damage

The core distinction in deposit law: you cannot charge for normal wear and tear—the expected deterioration from ordinary use over time. You can charge for tenant damage—harm caused by misuse, neglect, or abuse beyond normal use. Courts and housing agencies often side with tenants when landlords overreach. Here's a practical comparison.

When in doubt, err on the side of wear and tear. Charging for normal deterioration can trigger disputes and penalties. Document everything with photos and written notes.

Deduction Checklist

Use this checklist to track which categories of damage apply to your move-out. Check off items you need to document and deduct for.

How to Calculate Fair Deductions

You can only charge for what you actually spent or a reasonable estimate—not inflated amounts. Some states require receipts for deductions over a threshold (e.g., $125). Key principles:

• •Depreciation: For items like carpet, appliances, or fixtures, you must prorate based on useful life. If carpet has a 7-year life and was 5 years old at move-out, you can charge only 2/7 of the replacement cost for damage.
• •Useful life: Carpet: 5–7 years. Paint: 2–3 years. Appliances: 5–15 years depending on type. Check local norms and IRS guidelines.
• •Documentation: Keep receipts, invoices, and before/after photos. If you do repairs yourself, document materials and a reasonable labor rate. Some states limit or disallow DIY labor charges.

Required Timelines

Most states require you to return the deposit or send an itemized deduction statement within a set period—often 14, 21, or 30 days after move-out. Some allow up to 60 days. If you miss the deadline, you may lose the right to deduct or face penalties (e.g., returning the full deposit plus one to three times the amount as damages). Send the statement and any refund by certified mail with return receipt. Document the move-out date clearly. Jurisdictions vary—check your state and local landlord-tenant laws.

Writing a Deduction Letter

A clear, professional deduction letter reduces disputes and strengthens your position if challenged. Include:

• • Tenant name and forwarding address
• • Property address and move-out date
• • Total deposit received
• • Itemized list: description of each deduction and dollar amount
• • Receipts or estimates (if required by your state)
• • Refund amount, if any

Use a factual, neutral tone. Avoid accusatory language. Be specific—e.g., "Repair of 3-inch hole in bedroom wall: $45" rather than "Wall damage." Attach copies of receipts for major repairs. Keep a copy for your records and send by certified mail.

Protecting Yourself from Disputes

Strong documentation is your best defense. Before and after comparisons make it much harder for tenants to challenge deductions.

• •Move-in inspection: Walk through with the tenant, document condition with photos and a checklist, and have both parties sign. Note existing damage so it isn't charged at move-out.
• •Move-out inspection: Conduct a walk-through as soon as possible after the tenant leaves. Take dated photos of all damage. Compare to move-in photos.
• •Repair records: Keep receipts, invoices, and before/after photos of repairs. If you do work yourself, log materials and time.
• •Communication: Send the deduction letter within your state's deadline. Use certified mail. Respond promptly if the tenant disputes—many issues can be resolved with a clear explanation and documentation.

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Security deposit laws vary by state, county, and city. Consult your jurisdiction's landlord-tenant statutes and consider speaking with an attorney for your specific situation.

Frequently Asked Questions

Related Guides

• Move-Out Inspection Checklist
• Tenant Damage Documentation
• How to Patch Drywall Holes in a Rental