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

How to Write a Security Deposit Return Letter

Author: Kasee Godwin
Date: 05.22.2023

Property managers who collect security deposits are always expected to send a security deposit return letter.

A security deposit return letter is used to inform renters about their rental deposit refund and any property damage they’re being held responsible for. This letter must be sent regardless of the security deposit being refunded in full, in part, or not at all, and return letters must be sent within the legally required timeframe, as set by state laws.

It’s important to send a detailed security deposit letter informing renters of the return or clearly explaining the reasons for any deductions and offering a reasonable amount of evidence or proof for doing so.

Property managers have been taken to small claims court for withholding a renter’s security deposit – even when the deductions are legitimate. A well-written security deposit letter is the best way to avoid this.

The easiest way to have security deposit letters written on time every time is letting Qira manage this with end-to-end security deposit management. Below we’ve outlined best practices when handling security deposit return letters on your own as a property manager.

How to write a security deposit return letter

A security deposit letter begins with general information about the property manager, renter, and their security deposit.

It starts with the names, addresses, and contact information of the property manager and renter. It should then state the rental lease term, the original security deposit amount, and how much is being refunded.

If the security deposit accrues interest over time, the refund letter must disclose this.

If no deductions were taken, the security deposit return letter can confirm that the deposit was returned in full and specify how it was returned, then end there.

If deductions were taken, the letter should break down the damages and associated costs and show some documentation. It’s best to provide an itemized list of deductions along with the total amount withheld.

Always include evidence for each deduction. You can write the property inspection date and include pictures or links to video footage taken at that time.

Quotes, repair summaries, receipts, bills, and other paperwork from third-party maintenance workers, contractors, service technicians, cleaners, and other service providers are great for demonstrating that deductions are legitimate.

Security deposit letters close with the property manager’s name, signature, and signing date. The package should also include copies of the lease and security deposit agreement. The safest way to send one is by using certified mail and requesting a return receipt.

Security Deposit Return Letter Example

A security deposit return letter should include the following:

  • Property manager name, company, address, and other contact information
  • Renter’s name and address
  • Date of letter
  • Confirmation of original security deposit amount
  • Statement of interest accrued
  • An itemized list of deductions, with explanations for each
  • Dates of any property inspections
  • Property Management signatures
  • Enclosed photos documenting the damage
  • Enclosed repair or service quotes, receipts, bills, or other documentation
  • Enclosed copies of the lease and security deposit agreement

Here’s an example of what these might look like:

Complete Security Deposit Return Letter Template

Date

Renter Name

Renter Address

Re: Security Deposit Return for [Rental Address]

Dear [Renter Name],

This letter is regarding your security deposit of $[amount] for the lease of [rental property address] from [lease start date – lease end date].

I am writing to inform you that I am returning your security deposit of $[amount] in full.

Regards,

[Property Manager Name]

[Property Management Company]

[Property Manager Signature]

Partial Security Deposit Return Letter Template

Date

Renter Name

Renter Address

Re: Security Deposit Return for [Rental Address]

Dear [Renter Name],

This letter is regarding your security deposit of $[amount] for the lease of [rental property address] from [lease start date – lease end date].

I am writing to inform you that I am returning $[amount] of your security deposit. I have made the following deductions in adherence with the terms of the rental agreement:

  • $[amount] due to [reason]
  • $[amount] due to [reason]
  • $[amount] due to [reason]

I have deducted a total of $[] and am refunding your remaining security deposit of $[]

Please contact me with any questions or concerns regarding the refund. I’m available at [contact information]. If you disagree, you can dispute the deductions within [timeframe] and can do so via [available dispute methods].

Regards,

[Property Manager Name]

[Property Management Company]

[Property Manager Signature]

Sending a rental financial statement or final account statement

A security deposit return letter can be sent in the form of a rental financial statement, also known as a final account statement.

This financial statement includes:

  • Renter’s name and address
  • Property manager’s name, address, and contact
  • Lease start date and end date
  • Statement of original security deposit amount
  • Accrued security deposit interest
  • Statement of security deposit refund
  • An itemized list of deductions
  • Final amount owed to either renter or property management  
  • Property manager signature and signing date
  • Enclosed copies of damage photos and maintenance, repair, or service quotes, receipts, or bills
  • Enclosed copies of the lease and security deposit agreement

Final account statements are a concise way to communicate with renters. Just remember to send this out in time, itemize all deductions, and include enough documentation.

5 Mistakes to avoid while writing a security deposit return letter

Property managers sometimes find themselves owing renters money simply because of poorly written security deposit letters. Here are five common pitfalls which can lead to that.

1. Not sending a security deposit return letter.

Security deposit return letters create a paper trail verifying that everything was done above board on your end.

2. Not getting a resident’s forwarding address.

Property managers sometimes forget or are unable to get a renter’s future address.

Add this into your management process when a rental period is ending.

3. Not using certified mail.

Security deposit return letters should be sent with a trackable mailing service that can verify delivery. Don’t risk having this letter get lost or letting a renter be able to claim that it was.

4. Not itemizing the deductions.

A security deposit deduction should be broken down into specific charges. Don’t write it as one general lump sum. Lump sums are vague and almost invite residents to dispute.

5. Not explaining a deduction.

Each deduction should be accompanied by a statement or description of the related damages. This provides more clarity around the charges and makes it clear that funds were withheld for legitimate reasons.

How Qira makes sending security deposit return letters easier

Writing clear and detailed security deposit return letters is essential. This ensures renters are correctly informed about their refunds and fends off nuisance claims when deductions are taken. Make sure to send these out in time via certified mail with a return receipt request. That’s the only way to guarantee and prove that a renter has been correctly informed.

Another option is to skip this altogether by letting Qira handle things for you with our end-to-end security deposit management services.

Qira collects, manages, and returns renter security deposits in compliance with your local laws. We communicate with them on your behalf and send out security deposit return letters when they move out.

Renters who leave things in great condition get their full deposit back, while those who don’t are deducted appropriate amounts. And if a renter causes damages that exceed their security deposit, Qira will pay you right away and then settle things up with the renter.

It’s the most stress-free and hands-off way for property managers to deal with security deposits and is a complimentary option for our partners!

Discover more now!

kasee-godwin-80x80

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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