Idaho Security Deposit Law: What Renters and Landlords Need to Know

How to Navigate Evolving Security Deposit Laws by State

Author: Kasee Godwin
Date: 05.15.2023

New security deposit laws are popping up all around the country.

Legislators in various states are proposing and passing laws that make deposits more amenable to the modern renter.

Some security deposit laws limit how rental deposits can be collected and managed. Other legislation asks property managers to offer security deposit alternatives. The most stringent ones prohibit security deposits from being used at all.

Why are security deposit laws by state changing?

It’s all about rental housing affordability. Security deposits increase the costs of accessing housing. Handing over 1, 2, or even 3+ months’ rent in cash is a significant expense. Even more so in areas with soaring rental prices.

Unaffordable security deposits create a financial burden that blocks people from getting into rentals and may contribute to housing instability and other socioeconomic issues.

Over 35% of Americans rent their homes. That’s a sizable chunk of the population, and the political landscape is moving to address their needs with renter-friendly policies and legislation. That includes creating new security deposit laws and lowering the cost of securing a rental.

How do these changes affect property management?

There are different security deposit laws by state. So, it all depends on where the property you’re managing is located.

Security deposit legislative changes typically fall into one of three general categories:

  1. Restricting the use of security deposits
  2. Prohibiting the use of security deposits
  3. Permitting or requiring security deposit alternatives

Security Deposit Restrictions

Most property managers are familiar with laws restricting how security deposits are used. All states have laws governing this to some extent, with the more lenient ones simply requiring deposit funds to be returned within a certain number of days.

Those laws are changing, and several states are beginning to tighten things up. 

Some states are moving to block landlords from collecting more than one month’s rent as a deposit. Others place administrative requirements on how renters should be informed. Some laws expand regulations that used to apply only to larger multi-unit residential buildings.

Security Deposit Prohibitions

Laws are being implemented that would forbid traditional security deposits from being used or required.

These laws aren’t currently the norm. However, many believe laws like this will eventually be widespread.

Security Deposit Alternatives or Replacements

Most of the new security deposit laws simply authorize property managers to give renters an alternative to lump-sum cash deposits.

This legislation is being created because security deposit alternatives are available and already in use. The laws set legal parameters and guidelines for using alternatives.

Which states are security deposit laws changing?

All states are moving towards implementing more renter-friendly laws and there are multiple security deposit laws under discussion all across the country.

Texas, Florida, Illinois, and California have proposed or passed new security deposit laws.


California has introduced a new assembly bill, AB-12, which would cap security deposit amounts at one month’s rent.

The state currently allows property managers to collect up to 2 months’ rent for an unfurnished rental or up to 3 months’ rent for a furnished place.

The proposed bill would only amend security deposit amounts. It wouldn’t alter existing legislation determining how deposits are to be managed or why funds can be withheld.


Florida recently passed House Bill 133 which would officially authorize property managers to offer fee-based security deposit alternatives in July of 2023 and mandates some statutory conditions for doing so. It is currently waiting on a signature from the Governor to be passed fully into legislation.

HB 133 regulates how property managers must communicate and manage the fee agreement. Some of its terms include providing written notification of the fee agreement’s conditions, signing a written agreement with the renter, and barring fee raises during the rental agreement’s term.

If passed, property managers can’t deny or approve rental applications based on whether or not the renter wants to pay a security deposit or a fee. And their renters have the right to stop paying the fee and switch to a traditional security deposit.


Illinois just passed Senate Bill 1741 which will update its security deposit legislation to make rental properties with less than 5 units subject to the same transparency laws as larger properties.

The bill requires all property managers to give renters itemized damage statements when withholding security deposit funds. The statements must be given within 30 days of when a renter vacates the property or when their rental term ends, whichever comes later. 

Illinois previously only required this for residences with 5 or more units. Once signed into law, these laws will apply to properties of all sizes.

As of May 11, 2023, Senate Bill 1741 has made it through both houses and is waiting to be signed into legislation.


In 2021, Texas passed Senate Bill 1793, allowing property managers to let renters pay fees in lieu of a security deposit. It also prohibits property managers from offering or denying housing based on the renter’s choice and sets various management guidelines.

This section of the Texas Property Code gets fairly detailed. It outlines specific conditions for renter communication, fee agreement terminations, and instances when fees are used to pay for insurance.

An interesting thing about Texas’s law is that it prohibits property managers from collecting damages from renters if they file for insurance coverage. It also blocks property managers from filing for insurance coverage if a small claims court found the renter not at fault.

What are security deposit alternatives?

Security deposit alternatives offer property managers financial protection without putting a cost burden on their renters.

Some of the options include offering payment plans, having another party provide a bond guarantee, or entering renters into a fee-based program.

Security Deposit Payment Plans

A security deposit payment plan lets renters pay their deposit over a few weeks or months. These payment plans can be helpful for renters who’d rather not come out of pocket all at once or who can’t afford to pay a deposit in the middle of a pricy move. 

But be aware that payment plans aren’t technically security deposit alternatives.

Payment plans might make it easier for renters to hand over deposit funds, but they still have to pay it.

Rent Surety Bonds

A rent surety bond puts property managers, renters, and a third-party surety provider into a three-way contract. The third party will pay you if the renter fails to pay rent or damages the property.

Surety bonds provide financial backing and will get property managers paid – but at a cost. These services come with steep non-refundable fees charged as a decent portion of the would-be security deposit.

A surety bond’s high non-refundable premium makes it far less attractive than other alternatives or a regular deposit for those who can afford to pay it.

Monthly Fees

A fee-based security deposit alternative lets renters pay a small non-refundable monthly fee instead of an upfront cash deposit. 

This is the most affordable deposit alternative property managers can offer. Renters can pay as little as $5 a month in fees.

Fee-based alternatives cost so little because renters aren’t paying for bond premiums or being charged enough to collect deposit funds over time.

How can security deposit solutions help property managers?

Security deposits are becoming more regulated. Cities and states are placing more restrictions on how property managers can collect them and increasing the standards for managing deposit funds and renters.

The same goes for security deposit alternatives. Some states micromanage this more than others, but all expect alternative solutions to be handled in a specific way.

Property managers have to navigate new protocols for collecting fees and damages.

Things can become even more complicated for property managers who choose to purchase insurance with the fee. Some states won’t even let property managers file for insurance coverage without notifying renters within a brief timeframe.

All of the legislative changes work to reduce the financial burden on renters but end up increasing the administrative burden on property managers. And this is where security deposit solutions come into play.

A security deposit solution, like Qira, is perfect for both property managers and renters. Qira is an end-to-end managed solution for both traditional and alternative security deposits. It takes over administrative responsibilities and legal liabilities.

Qira lets renters choose between paying a traditional upfront deposit or a low monthly fee. Qira collects and manages the funds, then handles any instances where renters default or owe money. Qira pays property managers, then works with renters to recover the funds.

It’s a low-risk way to eliminate management hassles and be guaranteed payment.

Discover more about Qira.


Kasee Godwin

Position: Director of Marketing
Social Networks

Kasee is the Director of Marketing for Qira. She has nearly 15 years of experience in the real estate marketing industry, including 10 years on the client side. In her spare time, she enjoys reading science fiction, exploring new wineries, and fostering Golden Retrievers.

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