what is a security deposit for rent

A security deposit is a set amount of money that a tenant pays to a landlord prior to moving into a rental property. Essentially, it’s like insurance for the managers/owners to protect their property from damage. The security deposit is a lump sum given to a landlord that confirms the tenant’s intent to rent the apartment and care for the unit. It will typically be required at the lease signing before you can move in and serves as a financial commitment that the tenant will take care of the unit to the best of their ability and follow all the rules outlined in the lease. The amount of money varies by state or property, but in general, the amount of the security deposit will be the equivalent of one month’s rent, or maybe two. The security deposits required by many residential landlords of their tenants are the source of much dispute and litigation. Many states and municipalities have enacted laws that specifically regulate the landlords ability to withhold tenant security deposits after a tenant moves out. The security deposit must be kept by the owner in an interest-bearing account in a New York State bank. The owner must notify the tenant of the name and address of the bank and pay the tenant the full annual interest, less 1% of the security deposit per year for the owner’s administrative costs.