What Is a Security Deposit Return Letter?

A security deposit return letter is a document that is written by a landlord to provide information about the return of a tenant’s security deposit. This letter document is usually made and given if a tenant is already leaving the property and he or she has already gone through the processing of his or her clearance. The main purpose of a security deposit return letter is to assure that the security deposit has already been given and that the tenant acknowledges the receipt of such.

Types of Security Deposit Return Letters

You have to keep in mind that there are different kinds of security deposit return letters. There are some that are differentiated with the time frames in which the letter will be given while there are also other measures that are looked into by different landlords to identify what kind of security deposit return letter to develop. For you to have a more in-depth knowledge with regards this matter, here are some types of security deposit return letters:

1. Full Security Deposit Return Letter

A full security deposit return letter is a standard letter document that you can use if there are no deductions that will be applied to the tenant’s security deposit. This letter is usually received by tenants who have been cleared during the moving out process and are proven to not damage the property or any of the materials, items, and equipment in it. Having a direct statement that there will be no deductions to the security deposit is an essential information that should be written in the introduction of this specific letter.

2. Security Deposit Return With Deductions Letter

A security deposit return with deductions letter is the type of security deposit return letter where specific deductions are listed to ensure that the tenant is aware on why he or she received a lower amount in comparison to the actual security deposit that he or she has initially given. When developing this letter document, it is imperative for transparency to take place. Have a complete identification of the matters and items which led to given deductions. In this manner, the tenant can be aware of why he or she will only receive the amount specified in the security deposit return letter.

3. Security Deposit Return Request Letter

A security deposit return request letter, unlike the other kinds of security deposit return letters that are made by landlords, is actually developed by a tenant. There are properties that require their tenants to do this particular letter so that the management can be reminded to create a security deposit return letter in return, and for the actual security deposit to be prepared for releasing.

Factors to Look Into When Crafting a Detailed Security Deposit Return Letter

Writing a security deposit return letter is actually very easy. However, challenges may come along if you will not be keen when selecting and presenting the information that are necessary to be seen in the specific letter document. Hence, it is essential for you to know the variables and elements that make up the type of security deposit return letter document that you need to create. Listed below are some of the most important factors that you have to look into when crafting a detailed security deposit return letter.

The specification of the total amount of the security deposit that will be returned: Your security deposit return letter should provide the exact amount of the security deposit given by the tenant and the amount that will be given to him or her. Make sure that you will provide these information on the introduction of the security deposit return letter as these are some of the main key points of the letter document.The content structure and discussion flow that you will incorporate in the letter document: You have to focus on the development of the document’s layout. If you can format the document accordingly, then it will be easier for you to place and put together all of the information that are necessary to be included in a standard security deposit return letter. More so, a well-structured document layout and content structure can lead to the creation of a smooth discussion flow.The identification of all the other information that the tenant should know: 36% of tenants specified that their landlords have given no explanation on why security deposits are withheld (source: aol). If you plan to withhold a particular amount of the security deposit or the entirety of it, it is important for you to present this in the security deposit return letter. All of the items about the security deposit and its return should be well-identified in the letter document so you can guide your tenant’s expectations accordingly. Also, ensuring the completion of important and necessary details can make your security deposit return letter as comprehensive and as transparent as possible.

50+ Sample Security Deposit Return Letters

Sample Security Deposit Return Letters

7 Steps for Making the Best Security Deposit Return Letters

Making a security deposit return letter from scratch is totally doable. However, there are a lot of things that you can do to make the process of developing the said document easier and faster. Aside from using references, you can also look into a step-by-step procedure so you can be well-guided as you begin the development of a specific security deposit return letter. Here is a seven-step process that can enable you to make the best security deposit return letter with ease:

Step 1: Download a Pre-Formatted Security Deposit Return Letter Template That You Can Modify

As a rental agreement contract expires, you security deposit return letter should template should already be prepared for editing. Look for the best template to use so you can properly develop the structure and other visual features of the specific letter document. Ensure that the template that you will use can be modified accordingly so you can still come up with a unique and suitable security deposit return letter that your property rental can optimize.

Step 2: Specify the Date When You Have Written the Letter Followed by an Inside Address, a Subject Line, and a Salutation

Write the actual and complete date of the letter’s writing. After this, present the details of the letter recipient which should include his or her name, contact information, and permanent address. It will depend on your decision on whether you will still use a subject line or not. Once all of these are already put into place, you can already write a formal salutation so you can address the letter recipient accordingly.

Step 3: Present the Key Points Aligned With the Return of the Security Deposit

Use an introduction which contains the most important items of your content presentation. To begin, state the name of your business and the relationship that you have with the involved tenant. Write the name of the tenant and the duration of his or her tenancy in your property. Then, specify the date when a given amount which serves as a security deposit has been handed by the tenant to the landlord. More so, provide the information on whether this amount will be given in full or if there are deductions which are needed to be made. Lastly, the date in which the security deposit and the letter document will be given to the tenant must be specified as well.

Step 4: Provide Any Deductions and the Reason/s for Such

There are deductions in the security deposit that may take place. As an example; if you have given a rent increase letter previously and you specified in this document that the difference between the current and new rental fee will be deducted on the security deposit during the first month when the change will occur, you have to make sure that such information will be reflected in the security deposit return letter’s content for clarification purposes. Any deductions should be clearly and transparently reflected in the security deposit return letter so that the tenant can be aware of why specific amounts have been subtracted to the  security deposit.

Step 5: Send a Message of Appreciation for the Tenancy

Thank the tenant for staying in the property for a given period of time. You can assure him or her that a landlord recommendation letter can be released should he or she need it in the future. These details are very important as it can enable you to promote your business brand.

Step 6: Use a Conclusion to Wrap-Up the Security Deposit Return Letter

To end your discussion, your conclusion should restate the amount that has been returned to the tenant. You can also provide a space in your business copy where the tenant can affix his or her dated signature as a sign of acknowledgment. Leave your contact information so that the tenant can be aware on where to reach you for any concerns or questions.

Step 7: Write a Complimentary Close Then Sign the Letter Document

Do not forget to use a complimentary close so you can formally close the letter. Write your full name and your position in the property rental before signing the security deposit return letter. Evaluate the document for a number of times before sending it to the intended letter recipient.

Benefits of Creating an Excellent Security Deposit Return Letter

You have to be confident that a security deposit return letter can bring good effects and impacts to your organization and to your tenants. If you need to be able to explain why making a security deposit return letter is necessary and deemed beneficial to all involved entities, knowing the advantages that this document can bring can come in handy. The benefits of creating an excellent security deposit return letter are as follows:

A security deposit return letter can assure all stakeholders that the security deposit has already been given back to the tenant: 26% of renters in the United States, at some point, have lost their security deposit (source: rentalcheck). You can stay away from this scenario if you will make sure that a security deposit return letter is present. Usually, a security deposit return letter is given upon the actual return of the security deposit to the tenant. Hence, having the specific document used and acknowledged can assure all parties that the transaction has been done at that a specific amount of security deposit has been received by the tenant.A security deposit return letter can explain why certain adjustments has been done to the security deposit: There will always come a time when a landlord need to deduct an amount to the security deposit. It can be due to the adjustments needed to be done during rent increase or because of a fee that needs to be paid by the tenant for property maintenance. A security deposit return letter can present these information accurately and clearly which can help a tenant understand why specific deductions has been made.A security deposit return letter can serve as the ending of the tenancy: Once a tenant has received his or her security deposit back, it only means that he or she already needs to leave the property as the specific amount is the last string that binds the transaction and the entities involved in it. With the usage of a security deposit return letter, you can promote formality with the last activity that will be executed between the tenant and the landlord.

Do’s and Don’ts for Developing an Effective Security Deposit Return Letter

If you will already begin to create a security deposit return letter, you have to gather a number of tips that can enable you to efficiently deal with all of the requirements of the document. Having a clear idea of the things that you have to do as well as those that you should not can give you a relative advantage especially when it comes to ensuring the quality of the document that you will come up with. Here are some of the guidelines that can help you develop an effective security deposit return letter:

Do’s

1. Do Review the Terms and Conditions of the Security Deposit Return

Get your hands on the clause of the rental agreement which deals with the specifications about the security deposit. You have to closely review the information specified in this section so you can make sure that the security deposit return letter will have content that are based or patterned on what you have agreed upon with the tenant during the beginning of the tenancy.

2. Do Ensure That the Security Deposit Return Letter Will Be Done in a Timely Manner

Know when the time is right in terms of writing a security deposit return letter. Make it a point that the tenant is already done with his or her clearance and other moving-out activities before you develop and hand him or her the specific document. The timeliness of the provision of security deposit return letter matters a lot not only because of the entitlements of the tenant but also because of the policies of the property that you have to follow.

3. Do Know How to Incorporate Formality and Accuracy Within the Entirety of the Security Deposit Return Letter

Once a house rental agreement has already ended,  you have to make sure that you will already take the time to develop all the documents that the tenant would need before leaving the property. Aside from his or her clearance, develop a security deposit return letter that is direct to the point. The latter document should be created in a straightforward manner so that you will not open it for a number of interpretations. The more precise and formal the items in this letter are, the easier it will be for you to make sure that you and the tenant have understood the document’s content in the same manner.

Don’ts

1. Don’t Use Any Falsified or Manipulated Information in the Security Deposit Return Letter

Whether it is a condominium (condo) rental agreement or any other kinds of rental agreement that will expire where a security deposit has initially been given, it is your responsibility as a landlord to assure your tenants that they will be receiving a security deposit return letter. As you try to develop this document, you have to keep in mind that all of the information which you will share must be fact-based. Do not manipulate any information especially when it comes to the amount that will be returned to the tenant. Any falsification of content will not only ruin your reputation but can potentially lead to court cases as well.

2. Don’t Put Too Much Information About the Tenancy Especially Those That Are Irrelevant With the Return of the Security Deposit

A security deposit return letter is made for a specific reason. With this, you have to stick with the goals and objectives that the letter should be able to realize. Do not include any details which are not related and relevant to the return of the security deposit. Never let your security deposit return letter overflow with information as this can result to a cluttered and poorly-developed document output.

3. Don’t Make Your Content Presentation Informal 

Since the security deposit return letter will be coming from the end of the rental property, you have to ensure that the document is business-appropriate. Never use an informal security deposit return letter as this can very much represent the way you deal with your tenants and the transactions where they are involved in. As much as possible, create a formal letter document which contains simple and informative details that can be understood by any reasonable person.

Create an outstanding security deposit return letter right now. Make sure to check out all the key points of the discussion above as well as the downloadable references that you can rely on. Select from the numerous templates and samples that we have listed so you can have a suitable document development guide that can help you make a necessary tool that you can use for announcement, documentation, and referencing.