Have you ever let a friend watch your house while you were away only to find it trashed when you returned? Landlords have a way to protect against this in their properties.
A security deposit is money paid before tenants move in, typically the first month's rent. It covers any damage or problems they cause.
Read on to learn everything you need to know about security deposits in Indianapolis, Indiana.
How Much Can Security Deposits Be?
Indiana's security deposit laws place no maximum amount on security deposits. You can charge as much as you feel is reasonable.
City and county courts may have restrictions on what they consider "reasonable," so be sure to check in with them.
What About Pet Deposits?
Pet deposits are allowed. This additional money covers any damage the animal may cause.
Tenants with service or emotional support animals are the exception. The deposit can't be applied if they can provide proof of their disability and the animal isn't dangerously aggressive.
What Deductions Are Allowed?
Landlords may take certain deductions from security deposits when the lease term runs out or ends prematurely. These include:
- Unpaid rent
- Unpaid utility costs
- Damage to the rental property beyond normal wear and tear
- Penalties for early termination of the lease
- Damage due to illegal activity
Natural damage that occurs during a tenancy is known as normal wear and tear. It includes the type of issues that you may notice during an inspection, such as minor scratches, fading, or stains.
Deductible damage takes this to the next level. It includes issues such as heavy stains, large holes, deep scratches, or missing fixtures.
There is a general rule of thumb to judge between them. If the cost of repairing the damage goes beyond the original amount of the security deposit, you can deduct it.
How Do You Return the Deposit?
Landlords have 45 days to repay the tenant whatever's left of the security deposit at the end of the lease.
They must also give an itemized list of any deductions. It should explain what was damaged, how much it cost to replace, and how much was taken from the deposit. This applies whether the tenant stayed the entire lease or left due to an eviction or other issues.
If the landlord fails to do this in time, they have to repay the full security deposit amount along with reasonable attorney fees. Tenant rights in Indiana include the right to go to court over the lost deposit.
What If There's a Dispute?
Tenants must file security deposit dispute cases within 6 years. If the damages are $10,000 or less, it goes to Small Claims Court. Any larger amounts go to Circuit Court.
This forces you to go through time-consuming and expensive legal proceedings. You also risk losing all the money from the security deposit.
How Else Can I Secure My Investment?
Tips about managing security deposits in Indiana are valuable pieces of landlord advice. They help avoid legal disputes and protect your property and bottom line.
PMI Meridian Management seeks to build strong communities through exceptional, full-service property management services. Our real-time updates ensure you're never in the dark about your property's performance. Get a free rental analysis to see how we can maximize your rental income today.
