What are security deposits primarily used for?

Security deposits are primarily used to cover unpaid rent or damages at the end of a lease. This means that if a tenant vacates the rental property and has not paid their last month’s rent, the landlord can use the security deposit to cover that loss. Additionally, if there are any damages to the property beyond normal wear and tear—which the landlord is responsible for repairing—the security deposit can be applied to these repair costs as well.

This practice protects landlords by ensuring they have a financial reserve to draw from should a tenant not fulfill their financial obligations or cause damage. The proper handling of security deposits is governed by specific state laws, which outline how much can be charged, how deposits should be kept, and the timeframe in which a landlord must return the deposit (or provide a written statement detailing deductions) after a tenant moves out.

The other choices do not accurately reflect the primary purpose of security deposits. For example, while maintenance may be a cost incurred during a lease, security deposits are not intended for such ongoing expenses. Similarly, while tenants may be responsible for their own utilities and the owner may need to secure financing, these functions are unrelated to the use of security deposits.