When you rent a house or apartment, you're usually required to pay a security deposit equal to one month's rent, which the landlord will hold until you move out. At that time, any expenses for cleaning or repairs beyond normal wear and tear and any unpaid rent will be deducted from your deposit and the balance will be returned to you. Most states have laws about how landlords have to treat security deposits. Usually they have to place them in an escrow account or an account separate from their normal operating account. The landlord may be required to pay you interest on the deposit, and is required to return it to you within a specified time after you vacate the apartment.

Getting Your Security Deposit Back

Security deposits are the cause of many disputes between landlords and tenants, but you can improve your chances of getting yours back without a hassle. Get a detailed receipt for any security or other deposits you pay. The receipt should show the date and amount paid, the name of the person you paid it to, the name of the landlord (if different), the address and apartment number the deposit is for, and a statement that it's a security deposit. Save the canceled check for the security deposit when your bank returns it in your monthly statement. This and your receipt are the best proof that you actually paid the deposit.

During the first week or so that you live in rented housing, go through every room and make a detailed list of everything that's broken, dirty, or damaged in any way, including chips in cabinets or tubs, holes in walls, broken windows, missing or broken knobs, tears in or stains on carpets, chips or rips in linoleum, burns, and so on. If possible, take pictures of the damage. Use your cell phone or webcam if it has photo or video capabilities. Send a copy of the list to your landlord and keep a copy with your pictures to use if needed when you leave.

Clean the apartment thoroughly before you move out (including carpets), and repair any damage you caused. Remove all of your belongings and any trash. Ask your landlord to walk through the apartment with you and give you a signed statement about the condition you left it in. This will be easier if you've already moved out your furniture. You may even want to take pictures of the condition of the apartment before you leave, in case you have to go to small claims court to get your security deposit back. Give the keys directly to the landlord (don't just leave them in the apartment) and leave your forwarding address so he can mail your deposit.

Pet Deposits

If you have a pet, plan to have a bit more difficulty finding an apartment and to pay a bit more. Many places simply don't allow pets. Others allow cats only, and still others allow small dogs under a certain weight and height. If you find an apartment that does allow pets, you may be required to pay a pet deposit in addition to your security deposit, to protect the property owner against any damages your pet may cause. Pet deposits can range from $100 to a full month's rent, and are often nonrefundable or only partially refundable.

Some states prohibit landlords from charging extra deposits for kids or pets or charging for credit checks. This doesn't mean your landlord won't try to charge you. It's important that you know your rights and the associated laws in your state or city.

Utility Deposits and Hookup Charges

You may be required to pay a refundable deposit and nonrefundable hookup charges to one or more utility companies, including electric, gas, water, sewer, and cable TV. Many electric companies require a deposit of several hundred dollars. If you can prove you had electric service recently in your name in another location and you had a good payment record, the utility company may waive this requirement. To prevent paying for utilities used by the previous tenant, if possible take utility readings as soon as you move in. (Ask your landlord how you can do this.) When you move out, be sure to request your deposit back from the utility company. Millions of dollars in unclaimed utility deposits sit in the coffers of state governments because residents moved without leaving a forwarding address.