What Step of the Renting Process Should the Security Deposit be Paid?

By Tenant

The security deposit is usually equivalent to a month’s worth of rent.  In some cases, it could be higher.  The tenant laws are available to make sure that we could get our security deposit back once we decide to move out.  But the use of the security deposit depends on each state.  For instance, in California the security deposit can be used to pay for last month’s rent but in most other states that’s not acceptable because the security deposit there will only be used for repairs that are beyond normal wear and tear.

I understand all these but my experience regarding security deposit is quite different.  Well, it may not be very different but it rarely happens to the people I know. So I’m sharing this with you in case you are experiencing this too.

So we were ready to rent a home and the agent from the property management showed us this beautiful home that just fits our budget.  The next step of the process is to fill out the application so that we would be approved for the home.  I understand it involves some credit checks, background history, and perhaps tenant or renting history. I don’t have any problem with any of that because I know that I’m a very good payer and I have a relatively high credit score.

However, the agent wanted us to pay the security deposit even without seeing the lease agreement yet.  So we thought that’s not possible.  And we actually did the right decision by declining to proceed with the application.

Here are some points for you to remember before signing anything.

  1. Do not give the security deposit if you haven’t read the lease agreement yet.  This is supposed to be common sense but sometimes, when we are at the height of our emotions we forget to stop and think things through.
  2. If you have the lease, ask if it’s possible for you to take it home and review it clause by clause.  Check if the security deposit can be used to pay for last month’s rent or not.  We also need to check as to what damages are considered beyond normal wear and tear and where the security deposit would apply.  Another point that you need to check would be how long it would take for the landlord to send you back your security deposit from the time that you moved out.
  3. The security deposit should always be refundable.  If the lease says that it is nonrefundable, then it is illegal.
  4. Paying the security deposit is the last step off the process.  Once you pay it, keys will be turned over and you should be able to move in to the new home.  If it’s the other way around, then don’t trust that landlord.

So there you go.  These are some of the most basic facts that you need to know about security deposits.  Be wary of landlords or agent who to get the security deposit from you before you could even sign the lease agreement because they could be up to something that you may not like in the long run.

For problems involving security deposit that you cannot resolve on your own, know that there are private organizations out there who are willing to step in and find a solution for you.  One of those organizations will be RPA.  They have a complaint center that you could use too. I believe this is the link http://www.rentalprotectionagency.com/complaint_center.php.

Edited on: Friday, February 8th, 2013 5:24 pm

10 Responses to “What Step of the Renting Process Should the Security Deposit be Paid?”

My response: (We welcome stories, examples, explanations, answers and a touch of your personality)


February 8th, 2013 5:40 pm

Thank you so much for this article. Most of the information presented are pretty basic and should be common knowledge for all tenants. However, you are right, you get so excited that we forget to read the lease agreement and only realize our mistakes once we get a hard time and getting your security deposit back.


February 8th, 2013 9:20 pm

You made the right position of not going through with the application. How can you trust a company that does not follow the normal renting procedure? If they?ve been in the business for long then they definitely would know that a security deposit should only be give once you agree to the lease agreement.


February 9th, 2013 12:40 am

Maybe there was the miscommunication there somewhere. Maybe the agent was referring to an application fee or a reservation fee. Because sometimes landlords or property management companies would require a fee for application. This fee would also be forfeited if you do not push through with the application.


February 9th, 2013 3:40 am

Well at least the agent was honest about it. Only stupid people will procceed with the application still.


February 9th, 2013 7:00 am

Yes, do not pay the SD. We run a brokerage firm and we only ask for the SD when the lease is ready. Usually, the lease agreement is ready 24hours from the time you got your application approved.


February 9th, 2013 10:20 am

Are you sure that’s a legitimate realtor? It sounds like they’re running scams.. Preying on people who don’t know about the basics of renting?


February 9th, 2013 1:40 pm

If the reason the realtor is asking you to pay a fee with the application is because they?re afraid of bounced checks, then they can just ask for cash instead. But in no way should they ask for the entire security deposit if they are not even sure that you would get approved. Remember, the application will determine if you are approved for renting or not. So it?s not yet an assurance that you?ll really get that property.


February 9th, 2013 5:00 pm

I have the feeling that your realtor would have used the wrong term. Maybe instead of saying holding fee or earnest money, he said security deposit. So it?s best if you would have clarified with him because if you really love the house then it would have been worth the effort to extend a little clarification.


February 9th, 2013 8:20 pm

Even if the realtor would say that they would get the security deposit back if you don?t get approved, it still sounds ridiculous to me that you would actually shell out the full amount of security deposit before signing anything. And then what if the realtor would just deny that you paid the security deposit because it?s not in writing? Then you?d be wasting good money on nothing.


February 9th, 2013 11:40 pm

I think you were talking to a rookie. Good thing you didn?t push through.


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