The landlord tenant closing statement to reconcile security deposit, is a landlord record used to document the deposits, credits, and deductions from the credits or security deposit for delivery to the tenant and for the benefit of both parties as it tracks the money held by the landlord and the amount due to the landlord.
The tenant is being required by the landlord to pay the security deposit to cover whatever expenses that may be incurred for any repairs of damages to the leased premises, excessive than normal wear and tear after the tenant moves out of the residential premise. Normal wear and tear is the result of everyday usage of the premises but excess damage may be a result of careless usage. A security deposit is different from a rent. It is a certain amount held by the landlord but actually belongs to the tenant and is allotted for any damages on the lease property during the tenant’s use of the premises and sometimes for unpaid rent, if any. Without the permission, a security deposit cannot be legally used to cover for a past due rent.
The law prescribes the limit on the amount of a security deposit that a landlord should charge the tenant. Law varies from state to state. There are states that also regulate that security deposits for residential properties must be kept and when should the interest income on the security deposits must be given to the tenant and also state laws prescribe over the schedule within which the deposit must be returned to the tenant after he vacates the premises.
If the tenant fails to pay the rent when it falls due, a written notice should be sent or delivered by the landlord to the tenant demanding payment of his due rent and the landlord’s intention to terminate the rental agreement if it is not settled within 5 days from the receipt of notice. If the tenant settled all past due plus the late fee agreed upon in the rental agreement, the rental agreement will not be terminated. But if the tenant fails to comply within the given 5-day grace period, the landlord may terminate the rental agreement by filing a special detainer action. After a special detainer action had been filed and a judgment has been entered in favor of the landlord and the tenant settled all past due rent, the penalty for late payment as agreed upon in the rental agreement, the lawyer’s fee and the cost of suit, and the reinstatement of the rental agreement is solely dependent upon the discretion of the landlord.
The landlord may recover all reasonable damages resulting from noncompliance by the tenant with the rental agreement from the security deposit and return what has been left after making all the necessary deductions.