Security Deposit
From LawDepot Law Library
Definition of "Security Deposit"
A security deposit is a sum of money that a tenant pays to a landlord to guarantee that the tenant will fulfill all obligations under the lease. The landlord holds the security deposit in trust for the term of the lease to ensure that the tenant does not default on the terms of the lease agreement or otherwise damage the property. Should the tenant damage the property (normal "wear and tear" excluded) or if the Tenant has not paid rent, the landlord is entitled to recover the amount owing from the security deposit. Usually the tenant must provide the landlord with the security deposit at the start of the lease term. At the end of the lease term, the tenant will receive the deposit back minus any allowable deductions for repairs/restoration/owing rent. Some jurisdictions do not allow deposits to be used for damages and the deposits would be called rent deposits in that case.
