Security Deposit
Security Deposit Meaning:
In deposit terminology, the term Security Deposit refers to an amount of money paid in advance and held in reserve in the event of the depositor failing on a contractual obligation. It is used by banks to secure credit cards for questionable borrowers as well a substantial security deposit when you open your Internet merchant account. Security Deposits are also commonly provided by tenants to help protect the landlord in a real estate lease.
In deposit terminology, the term Security Deposit refers to an amount of money paid in advance and held in reserve in the event of the depositor failing on a contractual obligation. It is used by banks to secure credit cards for questionable borrowers as well a substantial security deposit when you open your Internet merchant account. Security Deposits are also commonly provided by tenants to help protect the landlord in a real estate lease.
For example, a Security Deposit will often be put down on a new lease of a property or home. The Security Deposit would consist of an advance amount of money which is required by the leaser of the property from the tenant in order to cover any expenses the landlord might incur after the lease was up, and the tenant moved out. These expenses would consist of repairs to damages done to the property which would not be considered normal “wear and tear.” The Security Deposit is not considered rent and in some states is illegal to use for the last month’s rent. Some states have a limit on the amount of Security Deposit a landlord may charge.