What is a security deposit?

A security deposit is defined as a sum paid by the tenant to the landlord to cover potential damages or unpaid rent. This amount serves as a financial assurance for the landlord, protecting them against any financial loss that may occur if the tenant causes damage to the property or fails to pay rent. The security deposit is typically collected at the start of the lease and is held in a special account until the end of the tenancy. Upon the tenant's departure, the landlord will assess the condition of the property and determine if any portion of the deposit should be withheld for repairs or unpaid rent. This mechanism is crucial in rental agreements, establishing a layer of security for landlords while reinforcing tenant responsibility for the property.