Most residential landlords require tenants to pay a security deposit to cover any repairs needed when the tenant moves out, or to cover the tenant’s failure to pay the last month's rent.

Laws vary from state to state, but many states have statutes that provide the maximum amount of security deposit a landlord may require for a residential lease and the costs for which the landlord may use the security deposit (cleaning, repairs, unpaid rent) following termination of the lease.

These laws also provide a specific deadline (often 30-60 days) for the landlord to return the tenant’s security deposit following termination of the lease—after deducting any amount properly withheld, as allowed by law.

In California, residential landlords can require tenants to pay a security deposit, which is regulated under California Civil Code Section 1950.5. The maximum amount a landlord can charge for an unfurnished residential property is equivalent to two months' rent, and for a furnished property, it can be up to three months' rent. The security deposit can be used for repairing damages beyond normal wear and tear, cleaning the unit to return it to the same level of cleanliness it was in at the beginning of the tenancy, and covering unpaid rent. California law requires landlords to return the security deposit, or provide a written accounting of how it was applied towards cleaning, repairs, and unpaid rent, within 21 days after the tenant moves out. If deductions are made, the landlord must provide the tenant with copies of receipts for the charges incurred. If the repairs or cleaning exceed $126, the landlord must include copies of the receipts with the itemized statement. If the work has not been completed within the 21-day period, the landlord can provide a good faith estimate, and then has 14 days after the work is completed to send the receipts. Failure to comply with these requirements may result in the landlord owing the tenant the full amount of the security deposit, plus potential additional damages.