Security Deposit Return Letter Template

The letter that goes with a returned security deposit: what the deposit was, what was deducted and why, and what's coming back. Itemizing isn't just good manners — most states require an itemized statement whenever anything is withheld, and deposit disputes are one of the most common ways small landlords end up in small claims court. Copy the template, fill in the brackets, and delete lines that don't apply.

[Date]

[Tenant name]
[Tenant's forwarding address]

Re: Return of security deposit — [rental property address]

Dear [tenant name],

Your tenancy at [property address] ended on [move-out date]. This
letter accounts for your security deposit of $[deposit amount].

  Security deposit received:            $[deposit amount]
  [If your state requires interest:]
  Interest owed:                        $[interest]

  Deductions:
  1. [Item — e.g. carpet cleaning beyond
     normal wear, with brief reason]     -$[amount]
  2. [Item]                              -$[amount]
  3. [Unpaid rent / utilities, if any]   -$[amount]

  Total deductions:                     -$[total deductions]

  Amount returned to you:               $[amount returned]

A check for $[amount returned] is enclosed [or: has been sent to you
by (method)]. [If applicable: "Copies of receipts / estimates for the
deductions above are enclosed."]

If you have questions about any item, contact me at [phone or email].

Sincerely,

[Landlord name]
[Phone / email]

How to use it

Know your state's deadline. Every state sets a deadline for returning the deposit or the itemized statement, and they differ widely — some are as short as a couple of weeks after move-out. Missing it can cost you the right to deduct anything, and in some states triggers penalties of a multiple of the deposit. Look up your deadline before the tenant moves out, not after.
Deduct damage, not wear. The general line everywhere: you can deduct for damage beyond normal wear and tear and for unpaid amounts, but not for ordinary aging — worn carpet paths, small nail holes, faded paint. Write each deduction specifically enough that a stranger could understand it.
Attach evidence. Receipts, estimates, and the move-in/move-out photos. Some states require receipts for deductions; even where they don't, evidence is what settles arguments.

Not legal advice. This template is general wording, not legal advice. Deposit rules are among the most state-specific parts of landlord-tenant law: deadlines, whether interest is owed, what the itemization must contain, and the penalties for getting it wrong all vary. Check your state's statute before sending, and talk to a lawyer if the tenant disputes the deductions.

Common questions

How long do I have to return a security deposit?

It depends on your state — deadlines commonly run from a couple of weeks to around two months after the tenancy ends, and some states set different deadlines depending on whether you are making deductions. We have deliberately not printed a number here because the wrong one would be worse than none. Search your state's security deposit statute; the deadline will be in it.

What counts as normal wear and tear?

The gradual decline that happens when someone simply lives in a place: faded paint, minor scuffs, worn carpet in walking paths, small nail holes from pictures. Damage is the rest: stains, burns, broken fixtures, holes in doors, unapproved paint colors. The distinction is judged case by case, which is why move-in and move-out photos of the same rooms are the best money-saver in this whole process.

What if the damage costs more than the deposit?

Send the same itemized letter showing the deposit fully applied and the balance remaining, with documentation. Whether to pursue the difference — by agreement or in small claims court — is a cost-benefit decision. The letter and evidence are what make either path possible.

Do I need receipts for the deductions?

Some states require receipts or estimates with the itemized statement, at least when the tenant asks. Even where not required, include them — a deduction backed by a receipt rarely gets argued with, and one without often does. For work you did yourself, note the hours and a reasonable rate rather than inventing a contractor invoice.