The Landlord-Tenant Closing Statement to Reconcile Security Deposit is a landlord record used to document deposits, credits, and deductions from credits or 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 repairs 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 fixtures, but excessive damage can be the result of careless use. A security deposit is different from 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 any. Without permission, a security deposit cannot legally be used to cover back rent.
The law prescribes the limit on the amount of a security deposit that a landlord must collect from a tenant. The law varies from state to state. There are states that also regulate that security deposits for residential property must be held and when the interest income on security deposits must be released to the tenant and also state laws prescribe the timeframe within which the deposit must be returned to the tenant after of leaving the premises.
If the tenant does not 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 receipt of notification. If the tenant has paid all arrears plus the late fee agreed to in the rental agreement, the rental agreement will not be terminated. But if the tenant does not comply within the 5-day grace period, the landlord can terminate the lease by filing a special withholding action. After a special withholding action has been filed and a judgment has been entered in favor of the landlord and the tenant has paid all back rent, late payment penalty as agreed to in the lease, attorney’s fees, and the cost of the judgment, and the reinstatement of the lease depends solely on 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 whatever is left after making all necessary deductions.