Renting an apartment or house can be an expensive proposition. As you’re handing over a large check or big wad of cash for the first and last month’s rent and security deposit, you might wonder where does all of the money go?
First month’s rent
The first month’s rent is fairly self-explanatory. This money goes to cover the cost of the rent for the first month that you live in your new home or apartment. The landlord will use this money to pay for a wide variety of expenses, including current operating costs, necessary repairs, maintenance fees and taxes.
Last month’s rent
The last month’s rent serves as a form of financial protection for your landlord. This fee, which is generally equal to the fee of your first month’s rent, is used to protect the landlord in the event that you leave the property without paying the last month’s rent. For instance, say your rent is due at the latest on Sept. 5, and you move out without notice on Sept. 3. The last month’s rent covers the landlord’s costs for the month of September while he or she searches for a new renter.
A security deposit is the money you pay the landlord in case you damage the apartment or house. If the property sustains damage when you are in the home, the security deposit money will be used for repair work to make the apartment inhabitable for the next tenant. This money is not to be used for normal wear and tear, such as minor cleaning, or worn carpeting and flooring. These funds should instead be used for repairs such as holes in the walls, heavily stained carpeting, broken windows and damaged appliances.
By law, the security deposit you pay when you move in should be put in a savings account by the landlord so that the money is readily available. If the property does not sustain damages that need repair, the landlord is required to pay you back your security deposit when you vacate the premises. If there are minor repairs, the landlord must give you what remains of the security deposit once a portion of the money is used. He or she also owes you an itemized list as to how the money was used for repairs.
To protect your security deposit investment, do a walk-through with the landlord right before you move out. At that time, note in writing any areas that require repair. Doing this ensures that you’re both on the same page as to the condition of the property.
Understanding where the first and last month’s rent and security deposit on your rental property go is all part of being a responsible renter.