Questions often come up from both landlords and tenants relating to security deposits. How much can be collected? What steps need to be taken when a tenant moves out? What are the requirements for a landlord to retain a security deposit? A few simple rules will demystify the law concerning security deposits.
The Missouri statute V.A.M.S. §535.300.7 defines a security deposit as “any deposit of money or property, however denominated, which is furnished by a tenant to a landlord to secure the performances of any part of the rental agreement, including damages to the dwelling unit.” A landlord usually requires a security deposit, which is usually cash, when a tenant is moving into their property to secure payment for repairs of any possible damage done to the property by the tenant, beyond reasonable wear and tear. The security deposit belongs to the tenant until the end of the tenancy, only after the tenant vacates the property can the landlord determine damages and how much of the security deposit will be used for repairs.
When a tenant moves into a property the landlord can ask for as much as the total of two months’ rent as a security deposit, for example rent = $500 a month, the landlord can ask for as much as $1,000 for a security deposit. However, if the landlord asks for first and last month’s rent at the time the tenant moves in, the landlord can only ask for one month’s rent as a security deposit, because the payment of last month’s rent is also considered part of the security deposit, it ensures the tenant will not move out without paying their last month’s rent.
When a tenant vacates a property, the landlord is required under Missouri statute V.A.M.S. §535.300.4 to provide notice to the tenant of the date and time of the security deposit inspection. The tenant is not required to be present, but the landlord must provide notice so the tenant can be in attendance, if they so choose at the time of inspection. This notice must be made in writing, to the tenant, include the date and time of inspection, and either mailed to their last known address or provided to the tenant in person. A landlord should give a tenant “reasonable” notice of the date and time of the inspection, it would be in the landlord’s best interest to give at least 7 days’ notice.
Within 30 days, the landlord must either: 1) return the full amount of the security deposit; or 2) they must provide the tenant with a written itemized list of the damages and the cost of repair, that indicates the balance of the security deposit and what portion is being withheld. This statement must be mailed to the tenants last known address, which can be the address of the property the tenant rented from the landlord. *Important note: When you move out of a property, forward your mail to your new address so you receive all correspondence.* The landlord is allowed to withhold amounts from the security deposit to repair damage to the property (reasonable wear and tear excluded), to apply against rent due, and to compensate the landlord for their costs.
Please Note – The opinions stated above apply to residential security deposits ONLY, different rules apply to commercial tenants.