Security Deposit Deductions: How Small Landlords Document Move-Out Charges
Most security deposit disputes come down to one question: can you show what the unit looked like when the tenant moved in, what changed by move-out, and what each repair actually cost? If you document both inspections the same way and itemize every charge with photos and receipts, your deductions are easier to explain and easier to defend.
Normal wear and tear vs. damage
In general terms, normal wear and tear is the gradual aging that comes from ordinary living in a home, such as lightly worn carpet in walkways, minor scuffs, or paint that has faded over time. Damage goes beyond ordinary use, such as holes in walls, broken fixtures, burns or stains, or missing keys and remotes.
Where exactly the line falls, and what you may deduct for, is set by your lease and by state and local law. Many places limit deductions to things like unpaid rent and damage beyond normal wear, and some restrict charges for routine cleaning or repainting between tenants. Look up your own rules before you deduct anything.
Check your state and local rules first
Deposit limits, return deadlines, interest, what counts as an allowed deduction, how the itemized statement must be delivered, and penalties for getting it wrong all vary by state and sometimes by city, and they change over time. This article does not state any specific deadline or dollar limit because they differ from place to place.
Good starting points: your state attorney general (USAGov directory), HUD's state information pages, USAGov's tenant rights and landlord complaints page, and your state or city housing agency. When in doubt, ask a qualified attorney.
Document condition at move-in
- Walk every room with the tenant, using the same written checklist you will use at move-out.
- Mark each item's condition and note anything already worn or damaged.
- Take dated photos, number them, and write the photo numbers on the checklist.
- Both of you sign and date the checklist, and each keeps a copy.
Our move-in/out inspection guide walks through this step in more detail.
Document condition at move-out
- Before move-out: confirm the move-out date and forwarding address in writing, re-read the lease's cleaning, carpet, key and painting clauses, and check whether your state requires a pre-move-out inspection or notice.
- Inspection: walk every room with the signed move-in checklist side by side.
- Photos: photograph every change and number the photos so each one matches a line on the checklist.
- Keys: collect all keys, fobs and remotes, then count them.
- Wear vs. damage: note normal wear separately from damage as you go.
Itemize every deduction
- Deduct only what the lease and your local law allow.
- For each deduction, describe the item, point to the move-in and move-out notes and photo numbers, and attach a receipt, invoice or written estimate.
- Total the deductions and subtract them from the deposit (plus any interest owed, where your law requires it).
- Keep copies of everything: both checklists, the photos, receipts and the statement you send.
Example itemized statement
Example only. The names are fictional and the amounts and details are placeholders, not typical costs.
Deposit held: [amount]
Deduction 1: Bedroom wall, hole near door (move-in: Good; move-out: Damaged, photo #7) · Invoice from [repair company]: [amount]
Deduction 2: Missing mailbox key (move-in: 2 keys; move-out: 1 key, photo #12) · Receipt: [amount]
Not deducted: lightly worn hallway carpet (normal wear, photo #3)
Total deductions: [amount] · Amount returned to tenant: [amount]
Date sent / method: [date, method you can prove] · Prepared by: Alex Example
Return the deposit on time
Look up your state's deadline for returning the deposit and the itemized statement, and put it on your calendar the day the tenant moves out. Send the refund and statement in a way you can prove, such as a method with tracking, and keep copies. Then record the refund in your rent ledger. See how to keep a rent ledger.
A free checklist for move-out
The free Move-Out Deposit Deduction Checklist (pay what you want, $0+) is a one-page printable PDF, in US Letter and A4, with four sections: before move-out, move-out inspection, deductions, and returning the deposit. It covers the steps between the tenant's notice and returning the deposit. Get the free checklist.
Not legal advice. This is general information. Security deposit limits, return deadlines, interest, allowed deductions, notice requirements and penalties vary by state and city and change over time. Check your state and local law or ask a qualified attorney.
Want the full room-by-room form? The Small Landlord Kit ($15) includes the printable Move-In / Move-Out Inspection Checklist: Good / Fair / Damaged columns for move-in and move-out across 6 areas (entry and hallways, living room, kitchen, bathrooms, bedrooms, utility and exterior), a notes / photo # column, a Security Deposit Itemization page and signature lines. It also includes the Landlord Rent & Expense Tracker spreadsheet (blank and filled sample) and a Quick-Start Guide. The PDFs come in US Letter and A4.