Security Deposit Is Not Rent. If You Did Not Collect It Before They Moved In, You May Never Get It.

April 6, 2018 · Coauthored by Joe Cloer & Susan Cook

If you have allowed your tenant to take possession of your rental property without collecting the security deposit before the move-in, you are probably not getting that security deposit. You may have put the security deposit in the lease, asked for the money verbally, anything; but the fact is, unless you actually collected the security deposit before the tenant shut the front door, you let someone move in paying less than you intended. Maybe the tenant promised to pay in increments, said they would give the money to you a week late, made you think they would give you something down the road. If the tenant actually does that after moving in, you are extremely lucky.

Furthermore, the judge will not give you the security-deposit money as part of a dispossessory judgment, because the security deposit is not rent. The judge expects that you, as a property owner, behaved as a business owner when you began the business of renting property; moreover, the judge expects that you, as a business owner, collected the money that you required of the tenant (that is, made that tenant fulfill the obligations in your lease/agreement) before the tenant took possession of your house.

Security deposit is not rent. The security-deposit monies for rental properties are to repair damages beyond normal wear and tear, or to cover rent if the tenant defaults or abandons the property. If you did not collect the security deposit in the beginning, you may never get it.