Many first time landlords are unsure of how much they should charge for a security deposit. Landlords need to first check with their state’s laws to see if there is a maximum amount for the security deposit, and while checking for that piece of information, also review the procedure for the collection and return of the deposit. Some states, like South Dakota, have statutes regarding the security deposit that if not followed can create a headache for a landlord (read, “penalties”).
Amount to charge
South Dakota landlords cannot ask for or receive a deposit in excess of one month’s rent. A larger deposit can be agreed upon by the landlord and tenant only where special conditions pose a danger to the maintenance of the premises. A landlord can withhold funds from the security deposit to remedy damages beyond normal wear and tear and for unpaid rent or other funds due to landlord.
Returning the deposit
The landlord has two weeks after the rental agreement terminates and a forwarding address for the tenant is received to return the security deposit to the tenant, or to supply the tenant with a written statement showing how much (if anything) is being withheld and for what reason. In addition, within 45 days after termination of the tenancy, and if requested by tenant, the landlord must provide to the tenant an itemized accounting of any deposit withheld.
Stay organized, don’t get penalized!
SDCL § 43-32-24 states that if a landlord does not comply with the procedure for returning the security deposit then any rights to withhold any portion of the deposit are forfeited. In addition, if a security deposit or any portion of a deposit is retained in bad faith by the landlord, and this includes failure to provide the written statement and itemized accounting of charges, the landlord will be subject to punitive punitive damages not to exceed $200.
