What is a security deposit in a real estate transaction?

A security deposit is an amount of money that is given by a tenant to their landlord at the beginning of a rental agreement in a residential real estate transaction. This money is typically held in a separate account and serves as a way to protect the landlord from any damages caused by the tenant during the lease. In Delaware, security deposits are typically equal to one or two months of rent and must be returned to the tenant upon the completion of the lease. The use of a security deposit serves as an incentive for tenants to fulfill all obligations under the lease agreement because the deposit can be taken to cover any damages to the property caused by the tenant. The landlord is also able to use the security deposit to cover any unpaid rent or other fees that may be owed at the end of the lease. Under Delaware law, the landlord must return the security deposit within 20 days of the tenant moving out and providing them with a forwarding address. If the tenant does not receive the deposit back within that timeframe, they can file a complaint with the Delaware Department of Justice. Landlords are also required to provide tenants with a written itemization of all deductions taken from the security deposit. In short, a security deposit is a sum of money provided by a tenant to their landlord at the start of a rental agreement to protect the landlord from damages caused by the tenant during the lease. This deposit must be held in a separate account and returned to the tenant upon the completion of the lease.

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What is a security deposit in a real estate transaction?

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