A security deposit is a sum of money that a tenant pays to a landlord at the start of a rental agreement, usually equal to one month’s rent. It is held by the landlord and is intended to serve as a guarantee of the tenant’s performance of their obligations under the rental agreement. The security deposit is designed to protect the landlord from any damage to the rental property caused by the tenant, as well as any unpaid rent or other fees incurred during the term of the tenancy. In some instances, the security deposit may also be used to cover the cost of cleaning or repairs to the rental unit. The security deposit must be returned to the tenant at the end of the tenancy, provided that there is no damage to the property or unpaid rent or other fees. It is important for both the landlord and tenant to keep a record of all payments made in relation to the security deposit.
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Daniel H. Weberman, The Kabinet Founder – Terry I. Weberman, The Kabinet CPA
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