The American Apartment Owners Association (AAOA) is here to help landlords protect themselves and their investments. One way in which we do that is through the forms you need to ensure you are operating legally and have all necessary protections in place. The rental deposit form is an excellent choice for those landlords who want to be clear and concise with their tenants regarding the security deposits they pay when they rent the property.
Understanding the Security Deposit’s Role
A security deposit is a payment — often the cost of one month’s rent — that the landlord holds in escrow on a rental property. The landlord keeps that deposit in a bank account, where it will accrue interest, until the tenant moves out of the property. If the tenant leaves the property in the same condition it was in prior to the rental agreement, not counting normal wear and tear, the landlord repays the deposit, and in many states does so with interest. If the tenant leaves a problem that requires extensive cleaning or repair, the landlord uses the security deposit funds to pay for those repairs.
What the Rental Security Deposit Form States
The rental security deposit letter serves as a receipt and agreement about the rental deposit. It will include:
- • Acknowledgement of security deposit receipt
- • Information about where the security deposit is being held and what interest it is earning
- • Information about what interest you will pay to the tenant when the lease is up and the security deposit is repaid
- • Information about whether or not the annual interest on the security deposit has been paid on a yearly basis
The rental deposit agreement is important for the tenant, landlord and any future buyer of the property. For the tenant, a security deposit agreement provides peace of mind about where the deposit is and what interest it is earning. For the landlord, the security deposit letter outlines how and when the deposit is paid. If someone buys the property in the future, it also provides protection for the buyer, because prospective buyers of a rental property could be held liable for the deposit when a tenant moves out. The receipt outlines the responsibility for the repayment of the security deposit, so the buyer can work that into the purchase price or make arrangements to take control of the funds.
We have all of the forms landlords need for a successful rental agreement, including security deposit agreement templates. Download yours today, and protect yourself with a clearly outlined security deposit agreement.
All forms offered herein are provided only as a guide by the American Apartment Owners Association (AAOA). They have not been reviewed by legal counsel and no warranty, express or implied, is offered. AAOA suggests that you have local legal counsel that is familiar with current laws and ordinances review any forms prior to usage.