Returning a security deposit is part of being a landlord, as is writing a security deposit return letter. This letter should accompany the check for the deposit amount, clearly explaining any deductions.
This guide will help you write an effective security deposit return letter. Keep reading to learn what should be included in the letter and best practices surrounding this topic, as well as a template you can use to get started.
What is a security deposit return letter?
As a landlord, one of your duties is to return your tenant's security deposit in a timely manner once they've moved out. However, it's not enough to just put a check in the mail. Instead, it's better to write a letter that accompanies the check. In the real estate industry, this letter is known as a security deposit return letter.
While your security deposit letter doesn't need to be anything fancy, some specific information should be included, such as:
- The date you're sending the letter.
- The date the tenant moved into the property.
- The date the tenant moved out of the property.
- The property address.
- The total amount of the security deposit collected upon move-in.
- The amount being returned.
- An itemized list of any deductions and their explanations.
- The total amount of any applied deductions.
- The amount of the balance due to the landlord (if applicable).
- An address where the tenant can send the money (if applicable).
- Copies of any repair estimates (if applicable).
- Your signature.
- The date the letter was signed.
Best practices for writing a security deposit return letter
Now that you know what goes into a security deposit return letter, the next step in this process is to learn best practices for writing and sending your letter. Keep these points in mind.
Check state and local laws
When you're ready to return a security deposit, check your state and local laws surrounding the matter. Each state has its own landlord-tenant laws surrounding return of the security deposit. For example, some states require the security deposit be returned within 30 days of when the tenant moves out. Others give you 60 days. If you don't follow your state's laws, you could end up in small claims court.
Keep the language simple
While some landlords prefer their correspondence to sound like it was written by a real estate attorney, it's better if your security deposit return letter is written in plain language. That way, you'll know the tenant understands why and how certain security deposit deductions were made. It can also help reduce the chances of a dispute over the refund.
Include an itemized list and estimates for any damages
If you do have to deduct from the security deposit, your best bet is to include an itemized statement listing all your deductions. This can be especially helpful if you have to keep the entire security deposit. If there was damage to the rental unit, you may also want to take the time to include estimates for any necessary repairs.
While including an itemized statement along with your security deposit refund letter is only required in certain states, this is one situation where it's better to include it. If you do end up going to small claims court over the deposit, you'll have proof you provided all the necessary information to the tenant.
Consider including photos
When in doubt, consider including photos of any damage to the apartment as well. Not only will the photos provide proof of damages, but showing you have evidence may also dissuade the renter from trying to sue you for their security deposit. Just be sure to keep copies of the photos for your records.
Send the letter by certified mail
Lastly, sending your security deposit refund letter by certified mail provides the sender with a mailing receipt and confirms the item was delivered or an attempt at delivery was made. Again, both pieces of confirmation can serve as evidence if you do end up going to court over the deposit.
Security deposit return letter template
RE: Security deposit return
Dear [tenant's name]
This letter concerns the return of your security deposit for your time spent renting [property address] from [start date] to [end date].
Unfortunately, some deductions had to be made from the original security deposit amount of [original deposit amount] for [explanation of deductions]. In light of that, I have also attached an itemized list of the applicable deductions, as well as estimates for the necessary repair work.
The amount being returned today is [remaining balance]. A check for that amount is enclosed with this letter.
I wish you the best of luck going forward.
The bottom line
While writing a security deposit return letter is not the most glamorous part of being a landlord, it's a necessary task. Fortunately, once you've written a few of these letters, you should have the process down to a science. Hopefully, these tips and tricks will make your time spent writing much easier.