What is the difference of a security deposit and a fee? A security deposit is to “secure the performance of a rental agreement” signed by both the landlord and tenant. A deposit is always refundable as the landlord must account for any charges against the security deposit within 31 days after termination of tenancy/ the landlord receiving the keys to the dwelling. Any deposit not kept by the landlord must be returned to the tenant no later than 31 days after termination.
Security deposits are refundable if the tenant has complied with the terms of the contract. The allowed deductions from a security deposit are: reimbursing the landlord for a tenant leaving the property early and owes rent or late fees, to repair damages caused by the tenant or the tenants guests in excess of normal wear and tear, cleaning and carpet cleaning. Security deposits are NOT to be used as last months rent.
It is a great idea for landlords to provide a schedule of charges up front if damages were to occur to minimize disagreements for charges agains a tenants security deposit.
Fees are not deposits as fees are non refundable. A fee can be charged at the beginning of a rental contract for specific reasons such as: Application fee, non compliance fee (unauthorized pets or occupants), no smoking fee, late fee, etc.