Security deposit deductions: what you can take, what you can't, and what guessing costs

Before you total anything, open the move-in condition report and put it next to the move-out one. Every deduction you are about to take has to be traceable to a line that changed between those two documents. If you cannot point at the line, the deduction is a guess, and a guess is what tenants win on.

That is the whole job. The rest of this post is the order to work in.

Three buckets, not one number

Landlords tend to arrive at a single figure and then reverse-engineer a story for it. Work the other way. Sort every claim into one of three buckets first, because the buckets have different rules and different proof.

Unpaid money. Rent that was owed and never paid, plus anything the lease made the tenant responsible for and that you can show on a ledger. This bucket is arithmetic. It either matches the payment record or it does not.

Damage beyond ordinary use. A cracked vanity top, a door with a fist through it, pet urine in the subfloor. This is the contested bucket, and it is where the wear-and-tear test below does all the work.

Cleaning back to the move-in standard. Not cleaner than move-in. Back to it. If you handed over a unit with a grimy oven and got a grimy oven back, there is nothing to charge for.

Nearly every state’s deposit statute is built on some version of these three. What varies is the deadline, the itemization format, and whether there is a cap on the deposit in the first place. Those are state questions, not national ones, so check yours before you write the statement.

The test that decides most line items

Ordinary wear and tear is the result of a person living in a space in the way the space was meant to be lived in. Damage is the result of something else: neglect, an accident, or use the unit was not built for.

California puts the principle plainly, and it is worth reading even if you rent elsewhere, because the drafting is unusually direct:

Read that last clause twice. The cumulative effect across tenancies is still wear. A carpet that has absorbed four years of ordinary walking does not become chargeable damage because the fourth tenant is the one moving out. If the item was going to need replacing on a normal schedule anyway, you are asking the departing tenant to fund your capital budget.

A quick sorting habit that holds up: ask whether the condition would have happened to a reasonably careful tenant over the same number of years. Faded paint after three years, yes. A hole behind a doorknob because no stop was ever installed, also yes, and that one is on you. A burn ring on a laminate counter, no.

The test above covers most of it: would the same wear show up under a reasonably careful tenant, or did something get broken, stained, or removed early. California’s own security deposit rules walk through what counts as damage versus normal use in more detail.

Depreciation is the part everyone skips

Suppose the tenant ruined a carpet with an expected life of ten years, and it had been down for seven. You are not out the price of a new carpet. You are out the three years of life the carpet still had.

Charging the full replacement cost on a seven-year-old carpet is the line least likely to survive being questioned. Prorate it. Write the math on the statement so the tenant can follow it: original cost, useful life, years used, remaining value. A tenant who can follow the math argues less.

The same logic applies to paint, blinds, and appliances. Nothing in the unit is new forever, and the deposit is not a mechanism for making it new.

What a wrong deduction is worth

This is where the arithmetic turns against a landlord fast. Deposit statutes in many states carry a penalty on top of the refund when a landlord withholds without a basis or blows the deadline, and the penalty is often a multiple of the amount withheld.

Minnesota is a clean example of the pattern:

California runs a similar structure, and its own security deposit rules page walks through the penalty and the 21-day clock in detail. California’s own penalty, at Civ. Code § 1950.5(m), runs to twice the security in statutory damages on top of actual damages. The number differs by state. The shape does not: a $400 deduction you cannot support is rarely a $400 problem.

Set that against the size of the pot. The Census Bureau put the median asking rent for vacant units at $1,531 in the second quarter of 2026, so a one-month deposit is roughly a month and a half of your net on that unit. Losing a multiple of it over an unprovable $400 line is a bad trade every time.

Write the statement so it survives being read out loud

Assume a judge reads your itemization aloud. Every line should answer four questions without anyone asking: what was wrong, where in the unit, what it cost, and who says so.

• Name the room and the item. “Bedroom two, closet door” beats “damage.”
• Attach the invoice or the estimate. Several states require documentation above a threshold. California lets you skip it only when repairs and cleaning together come to $125 or less, under Civ. Code § 1950.5(h)(4)(A).
• Show depreciation math where the item had a useful life.
• Keep unpaid rent on its own line, separate from repairs. They are different claims.

If the work genuinely cannot be finished inside your state’s window, a good-faith estimate followed by the real receipts is usually the right move, and some states say so explicitly. Sending nothing is the option that costs you.

Do this on the next move-out

1. Pull the move-in report and the move-out report side by side.
2. Sort every claim into unpaid money, damage, or cleaning.
3. Delete anything you cannot tie to a photo or a line item that changed.
4. Prorate anything with a useful life.
5. Check your state’s deadline and receipt threshold, then send the statement and the refund together.

The deposit calculator will do the arithmetic and the deadline for you, and deposit tracking in LeaseRooster pulls suggested deductions straight from the move-in and move-out comparison. Nothing is applied until you accept it, which is the correct default: the software should not be the one deciding what a scuff is worth.

This is general information, not legal advice. Rules change and local ordinances vary. Confirm current requirements with your city, county, or an attorney before you act.