The Landlord-Tenant Closing Statement to Reconcile Security Deposit is a landlord record used to document deposits, credits, and deductions from credits or the security deposit to be given to the tenant and for the benefit of both parties, as it tracks the money held by the landlord and the amount owed to the landlord.
The landlord requires the tenant to pay the security deposit to cover expenses that may be incurred for any repair of damage to the leased premises, excessive wear and tear after the tenant moves out of the residential premises. Normal wear and tear is the result of daily use of the facilities, but excessive damage can be the result of careless use. A security deposit is different from a rent. It is a certain amount held by the landlord, but actually belongs to the tenant and is allocated for any damage to the leased property during the tenant’s use of the premises and sometimes for unpaid rent, if applicable. Without permission, a security deposit cannot legally be used to cover past due rent.
The law prescribes the limit on the amount of a security deposit that a landlord must collect from the tenant. The law varies from state to state. There are states that also regulate that security deposits for residential property must be kept and when interest income on security deposits must be released to the tenant, and state law also prescribes the time frame within which the deposit must be returned to the tenant after to leave the premises.
If the tenant fails to pay the rent when it is due, the landlord must send or deliver a written notice to the tenant demanding payment of the rent due and the landlord’s intent to terminate the lease if not resolved within 5 days. from the receipt of the notification. If the tenant paid all arrears plus the late fee agreed to in the rental agreement, the rental agreement will not be terminated. But if the tenant fails to comply within the 5-day grace period, the landlord can terminate the rental agreement by filing a special withholding action. After a special withholding action has been filed and a judgment entered in favor of the landlord and the tenant has paid all back rent, the late payment penalty as agreed to in the lease, attorney’s fees, and the cost of the trial, and reinstatement of the rental agreement is solely at the discretion of the landlord.
The landlord may recover all reasonable damages resulting from the tenant’s breach of the rental agreement from the security deposit and return what is left after making all necessary deductions.