Northern Nevada landlords, just like those elsewhere in the county, will often require a security deposit as part of the leasing process. Most states, Nevada included, have a limit as to how much it can be. The security deposit amount can be as little as one month’s rent or as much as three times the monthly rent.
But why does a landlord require a security deposit for their premises in the first place? Basically, like a surety bond, landlords require a security deposit to help cushion them against any sort of financial loss from the tenant. A tenant's security deposits helps cover for things like excessive property damage, lost rental income, excessive cleaning costs, or unpaid utilities upon move-out.
Unfortunately, due to a poor understanding of the Nevada law, it's not uncommon for a landlord-tenant security deposit dispute to occur. A tenant may think that they have returned the rental property just like it was initially, but the landlord may think otherwise.
In this article, we here at Evolve Nevada are going to cover everything a landlord needs to know about Northern Nevada’s Security Deposit Laws.
Security Deposit in Northern Nevada: A Guide
Is there a limit to what a landlord can charge as security deposit?
Yes, Northern Nevada law places a limit on how much a landlord can charge for security deposits. How much the landlord can charge depends on the type of investment property they own.
Under Nevada's security deposit law, if the property is private housing, then landlords are required to charge no more than 3X the price of one month’s rent for the security deposit. So, simply enough, if the monthly rent is $1,000, then as a landlord you shouldn’t charge more than $3,000 as security deposit.
If the property is public housing, then the law requires the landlord to charge security deposits that are the equivalent of one month’s rent.
If the property is section 8 housing, then landlords have the option to charge the equivalent of a month’s rent or fifty dollars, whichever is more.
Can landlords charge a deposit that is non-refundable in Nevada?
Except for the cleaning fee, all security deposits are deemed refundable so long as the tenant abides fully by the contract for the premises. As for the cleaning fee, the amount should be clearly written in the lease or rental agreement.
Do landlords need to notify tenants after receipt of their deposit?
Yes, if a tenant requests to be notified after the receipt of their security deposits. A landlord may give them a signed, written receipt. Otherwise, it isn’t necessary for you as a landlord to do so. Besides notice, the tenant can also request written receipts of rental payments and the surety bond.
How should landlords store the tenant’s security deposit?
There are no specific rules regarding the storage of tenant’s security deposits. In Northern Nevada, unlike some states, a landlord can choose to commingle the funds with other funds. They can also choose to place them in either an interest-earning or a non-interest-bearing account.
Even if the security deposit is stored in an interest-earning account, landlords won’t have any obligation to pay tenants any accrued interests.
Can a tenant use a surety bond in place of a security bond?
Yes, the tenant can do so. That notwithstanding, under Nevada law, a landlord is under no obligation to accept the surety bond, nor can they force the tenant to use a surety bond instead of security deposits.
What can a tenant deposit be used for in Nevada?
As part of the rental agreement, a landlord can keep a portion or all of the tenant’s security deposit for certain reasons, including:
• To cover excessive property damage. This is among the top reasons why landlords require a security deposit. This helps shield them from negligent a tenant that does things to the rental property like paint walls unauthorized colors, make large holes in walls, break mirrors or windows, et cetera.
• To cover lost rental income. This is for when a tenant chooses to break their lease early or abandon the rental property.
• To cover loss in rent payments. A tenant’s failure to pay rent is a serious violation of the lease agreement. Yet, rental payment is probably one of the top problems experienced by North Nevada landlords.
• To cover excessive cleaning costs. A tenant is usually required to return the rental property just like they found them when they first moved in. Sadly, not all tenants do this. If the tenant fails to honor this duty, landlords reserve the right to make the appropriate deductions.
• To cover for unpaid utilities. Under the rental agreements, the tenant is responsible for several utilities during the lease period, for instance, gas and electricity. When moving out, they have a responsibility to ensure they leave no unpaid bills.
The deductions need to be reasonable to the security or surety bond. A landlord must also provide their tenants with an itemized list of deductions when returning the remaining portion of the deposit. If the landlord fails to do this, it will be less viable if tenant disputes go to court.
Are walk-through inspections necessary when a tenant is moving out?
No, walk-throughs aren’t necessary in Nevada.
How long do landlords have to return the tenant’s deposit?
Under Nevada's security deposit law, a landlord has 30 days to return their tenant’s security deposit, minus any deductions, once they move out. If some deductions have been made, then the landlord must include an itemized list.
When refunding the security deposits, a landlord has two options. One, the landlord can mail the surety bond to the tenant’s present address; or two, the landlord can deliver it personally to the tenant.
But what happens if the tenant doesn’t agree with the deductions the landlord has made? In that case, the tenant must send the landlord a statement indicating where they are disputing the deductions. If nothing works out of court, then the tenant can file a lawsuit in a small claims court.
What happens when the property changes hands? (Security Deposit Transmittal)
A landlord will have two options if their property is acquired by a new owner. As the former landlord, he or she can elect to transfer the secuity deposits to the incoming owner and notify the tenants; or two, they can return the deposits to the tenants, minus any deductions.
Disclaimer: This blog is in no way a substitute for legal advice. Please contact a qualified attorney or property management company for any questions or further clarifications required on security deposits. Laws change all the time, and this post may not be updated at the time you read it.