General information, not legal advice. This template is a starting point. Laws differ by state and city, so have a licensed attorney review your final document before you use it.
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The short version
- Every state sets a deadline to return the deposit or send an itemized list, commonly between two weeks and a month after move-out.
- Deduct only unpaid amounts owed under the lease and damage beyond normal wear and tear.
- Attach or keep proof for every deduction: photos, receipts, invoices or estimates.
- Missing the deadline can cost the right to keep any of the deposit, and some states add a penalty.
What this letter is
A security deposit return letter is the itemized statement you send after a tenant moves out. It shows the deposit you held, any interest, each deduction and why, and the refund or balance that results. In most states a written, itemized statement is required whenever any part of the deposit is kept. It is also the document a judge reads first if the tenant disputes a deduction.
When to send it
As soon as you have finished the move-out inspection and priced any work, and always within your state’s deadline. Do not wait for every repair to finish. Send the statement on time with estimates where your state allows them.
How to use the template
- Pull the move-in checklist, move-out checklist and both sets of photos.
- List the deposit and any interest you owe.
- Add each deduction with its location, reason, cost and proof.
- Work out the refund or the balance owed.
- Send the refund with the statement, fill in the mailing record and keep a copy.
What can be deducted
- Unpaid rent and other charges owed under the lease.
- Repairs for damage beyond normal wear and tear.
- Cleaning needed to bring the home back to its move-in condition.
- Removal of items left behind, following abandoned property rules.
What usually cannot be deducted
- Normal wear, such as faded paint, light carpet wear or small nail holes.
- Routine repainting or carpet replacement at the end of their useful life.
- Upgrades or improvements for the next tenant.
Tips
- Prorate long-lived items. Charge for the remaining life of an item, not a brand new replacement.
- Write deductions a stranger could follow. Room, item, what happened, what it cost.
- Use tracked mail and keep the receipt.
Common mistakes
- Missing the deadline, the most expensive mistake in this area.
- Vague deductions, such as cleaning, with no detail or proof.
- Charging for normal wear and tear.
- Keeping the deposit with operating money where the law requires a separate account.
Deposits in TenantLoop
In TenantLoop, security deposits post to their own liability account from the first day, so a deposit never shows up as income. A move-out inspection compares each item with the move-in record, with photos on every item, which gives you the proof behind each deduction.
What is in the template
An itemized statement sent after move-out that lists the deposit held, any interest, each deduction with its cost and reason, and the refund or balance owed.
- Statement of security deposit
- Deposit held
- Deductions
- Result
- Mailing record
Read the whole security deposit return letter template
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General template, not legal advice. Have an attorney in your state review before use.
Before you send it.
When does the deadline start?
Usually when the tenant moves out and returns possession, which is often marked by returning the keys. Some states count from the end of the lease. Check your state's rule.
Where do I send the letter?
To the forwarding address the tenant gave you. If they did not give one, many states allow the last known address, which is often the rental itself. Use a method with tracking.
Can I charge for my own labor?
Usually yes, at a reasonable rate, as long as you describe the work and the time. Some states require receipts or detailed estimates for any charge.
What if repairs are not finished by the deadline?
Use a good faith estimate, send the statement on time, and follow up with the final invoice if your state requires it.