Salt Lake City has the most competitive rental market in the West. This is great news for new real estate investors in the region, but it also spells trouble.
Any minor misstep could tarnish your reputation and scare off future tenants. When that misstep involves infringing on tenants' rights, it could put your entire career in jeopardy.
As prominent Salt Lake City property managers, we stay on top of all changes to state and local rental laws. Today, we're here to talk about collecting and returning security deposits.
Read on for our quick guide to Salt Lake City security deposit laws.
What Is the Most You Can Charge?
The first thing you must be aware of is the maximum security deposit amounts you can charge in Salt Lake City.
For an unfurnished apartment, landlords can ask for a security deposit worth two months' rent plus an additional early payment of the first month's rent. For a furnished apartment, landlords can ask for a security deposit worth three months' rent plus an additional early payment of the first month's rent.
When Can You Deduct From Security Deposits?
Security deposits are not part of a landlord's rental income. Instead, they serve as protection in the event that a tenant creates an undue financial burden. For example, you can deduct money from the tenant's security deposit if they:
- Fail to pay rent
- Create damage to the property beyond expected wear and tear
- Fail to clean the property before vacating
The deduction must align with the cost of the issue it is meant to resolve. In other words, you can't withhold 100% of a security deposit if you only need 50% of it to cover the cost of excessive property damage. You should always provide an itemized list of deduction costs, which you can send in the mail or via the tenant portal, to avoid pushback from the tenant.
When Should You Refund a Security Deposit?
If a tenant does not meet the above criteria, you should refund their security deposit once their lease ends and you have inspected the property. You also have 30 days to refund any pre-paid rent if the tenant was consistently compliant with rent collection.
If you are deducting any money from the tenant's security deposit, you must let them know within 30 days. The tenant has grounds to sue if you don't provide notice of a deduction or a refund within that timeframe.
Partner With Utah Property Solutions
There are many practices that landlords should adopt to keep tenants happy. There are others that are dictated by state and local laws. When it comes to collecting and returning security deposits, it's crucial that you are aware of and meet all legal requirements.
Are you a Salt Lake City property owner looking for a hands-off experience? Are you struggling to stay on top of the latest tenant rights in the state of Utah?
Utah Property Solutions is proud to provide full and custom property management services in Salt Lake City and surrounding areas. Contact us today to learn more.
