When do you pay security deposit and first months rent

Yes, a landlord is allowed to ask for a deposit. The maximum deposit is three months’ basic rent (excluding utility charges). This maximum has been set by the courts.   

Make sure you get a receipt

Ask for a receipt when you pay the deposit, or pay by bank transfer. Then you can prove that you have paid the deposit and what the amount was.

Deposit gives the landlord more certainty

A deposit gives the landlord more certainty that he will not be left with unpaid rent at the end of the tenancy. And that he will not be left to pay the costs of any damage to the property caused by the tenant. The landlord is allowed to deduct unpaid rent or the costs of damage from the deposit before paying it back.

Sometimes tenants do not leave the property clean and in an acceptable condition at the end of the tenancy. Or they do not hand over the property to the landlord in line with the agreements that have been made about the handover. The landlord then faces the cost of making sure the property is clean and tidy for the next tenant. The landlord is allowed to deduct these costs from the deposit before paying it back. But the landlord is not allowed to deduct costs for ordinary wear and tear or for damage due to their own poor maintenance of the property. 

Deposit too high: refuse to pay or go to court

If the deposit asked for by the landlord is too high, you have two options:

• You can refuse to pay the deposit. This makes it unlikely you will get to rent the property, however.
• You can pay the deposit and then ask a court of law to reduce it. If the court reduces the deposit, the landlord must pay back the difference.

The landlord must pay the deposit back when the tenancy ends

The landlord must pay the deposit back to the tenant when the tenancy ends. The landlord does not need to pay the tenant interest on the deposit. 

If the landlord does not pay back the deposit

If the landlord refuses to pay back the deposit when the tenancy ends, write the landlord a letter asking them to repay the deposit. You can use the model letter (in Dutch) on the website of the Legal Aid and Advice Centre. You can also use this letter if the amount deducted from the deposit by the landlord before it was repaid is too high. 

If the landlord still refuses to pay back the deposit you can go to court to demand repayment.
 

Make good agreements on the handover of the property

As a tenant, there are certain steps you can take to ensure the landlord does not deduct unjustified amounts from your deposit. Before the end of your tenancy, ask how you should hand over the property. And make sure that the landlord draws up as comprehensive a report as possible on the condition of the property when it is handed over. It is a good idea to be present when this takes place. Check whether the report is dated and includes the name and signature of the person who drew it up.

If the landlord or the property manager does not draw up a report before the handover, take photographs of the property yourself and record any defects in writing. Send your photographs and your written description of defects to the landlord well before the handover. 
 

Legal Aid and Advice Centre: advice on deposits and handover

You can get free legal advice on deposits, property handover and going to court to ask for money to be repaid from the Legal Aid and Advice Centre. (in Dutch) 

You may need to begin saving more than planned if you're looking for a new apartment. A landlord, at minimum, will most likely expect you to pay your first month of rent before moving in. But landlords may also ask for a security deposit and request that you pay your last month's rent before agreeing to rent to you. A security deposit is usually equal to one month's worth of rent, but may be less. A landlord can charge any security amount they choose as long as its within certain legal limits. Before renting an apartment, understand what you're paying and what your landlord can do with the funds.

Getting Started is Expensive

When renting an apartment you typically must pay your rent in advance, or at the beginning of the month. As such, expecting you to pay your first month of rent before you move in should not come as a surprise. In some cases your landlord will need to prorate your rent. Let's say your lease requires you to pay your rent every month on the first of the month but your lease doesn't begin until June 15. Since you're only responsible for the apartment for half of the month of June, you'll only need to pay half the month's worth of rent, or a prorated amount. In such a cases, it's not unusual to still have to pay the entire month's worth of rent to get started, and then pay the prorated amount the following month.

Security Deposits are Safety Nets

Some tenants stain carpets, leave holes in walls or leave behind trash when they move out. To protect themselves from potential damage, landlords often ask for a security deposit. If you damage the apartment, this money goes toward repairs. If you don't, the landlord will return the deposit to you. In some places, your landlord can also keep your security deposit to cover any unpaid rent. Landlords aren't required by law to ask for a security deposit but many prefer to have it as a safety net. Additionally, if your rent increases once your lease expires and you choose to renew, your landlord can also require an increased security deposit.

Security Deposit Amount Varies

Landlords often request a security deposit in the amount of one month's rent. In California, a security deposit may not exceed two months' worth of rent. The security deposit limit in California may be as high as three months' worth of rent when renting a furnished apartment. Some states, like Arizona and New Jersey, limit security deposits to 1.5 times the amount of monthly rent. Other states place no legal limits on security deposits, but local rental markets and custom will dictate how much landlords charge for security deposits. Property owners in Colorado, Kentucky and Vermont, for example, can charge any amount they like when requesting a security deposit.

Security Deposit Refund Rules

State laws may also dictate what a landlord can do with your security deposit if they use it. Some states forbid the commingling of funds, requiring landlords to keep security deposits in separate bank accounts rather than their own personal accounts. Laws may also require landlords to place deposits in an interest-bearing account and pass the earned interest on to the tenant when refunding the deposit. Although California law doesn't require your landlord to pay you interest on your security deposit, the state's rent-controlled cities do.

Last Month's Rent Limits

If you do damage to the apartment that exceeds the amount of your security deposit, your landlord can't dip into your last month's rent deposit to cover the damage. A landlord may require last month's rent as additional funds should you decide to miss your final payment, give less than the required notice when vacating or otherwise skip out on the rent or apartment. A last month's rent requirement is more likely to be imposed on a tenant with past rental problems, such as eviction, late payments or otherwise poor rental references.

Do you pay security deposit before signing a lease California?

Can a landlord ask for first and last month rent plus security in Texas?