One of the first and most important steps you’ll take with a new tenant is collecting their security deposit. This payment serves to finalize the lease and protect you and your property against damages caused by your tenant.
Many states have strict laws governing how to handle security deposit funds. Proving you’ve followed the rules can be vitally important in case of a dispute, and a detailed receipt can provide useful evidence of your good conduct.
Keep reading to find out when and how to provide a receipt for security deposit, and get a free printable security deposit receipt form to simplify the process.
What is a security deposit receipt?
A security deposit receipt, sometimes called a rental deposit receipt, is a written record provided by you, the landlord, to a tenant that documents the details of the security deposit paid, including how much for security deposit was collected and when. If you’re collecting a security deposit on Airbnb, issuing a clear and accurate receipt is especially important for transparency and dispute resolution.
While providing a security deposit receipt is only required by law in a few states, it’s always a good idea. Whether you’re collecting a traditional deposit or using alternatives to security deposit for a rental, having a proper receipt can protect you in the event of a dispute by showing you acted in good faith and followed applicable laws.
What to include in a security deposit receipt?
Your security deposit receipt should include all of the transaction details. Include your name and contact information, the tenant’s name and address, the amount of the deposit paid, and information about where and how the deposit is being held, including the applicable interest rate on security deposit, if required by state law. This information also helps ensure accuracy when preparing the lease deposit return letter at the end of the tenancy.
A security deposit receipt should include:
- Landlord’s name
- Landlord’s address
- Tenant’s name
- Date of receipt
- Property address
- Amount of security deposit vs rental deposit
- Name of financial institution
- Address of financial institution
- Landlord’s contact information
- Landlord’s signature
Click here to download your free printable security deposit receipt template.
When to deliver a security deposit receipt?
Ideally, you should provide a receipt of deposit as soon as the money is confirmed to be deposited in your bank account. It’s best to wait until the transaction has cleared from your escrow banking, especially if your tenant has paid their deposit by check, to ensure you’re not providing a receipt for money you haven’t actually received.
A more convenient time to deliver a security deposit receipt is when you meet your tenant to perform a move-in inspection and give them their keys. Just keep in mind there may be a legal time limit to provide a receipt. Such as in Massachusetts, where it must be provided within 30 days, along with requirements to disclose applicable escrow interest rates and inform tenants of any reasons to put rent in escrow under local laws.
Collect security deposits and rent payments with Baselane
Collecting first and last month rent and security deposits payments doesn’t have to be difficult. Baselane’s online rent collection automates rent payments, reminders, and late fees, so you can stop chasing tenants for rent and start getting reliable, on-time payments.
