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 do landlords require a security deposit in the first place? Basically, landlords require a security deposit to help cushion them against any sort of financial loss from tenants. Security deposits help 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 law, it's not uncommon for a landlord-tenant security deposit dispute to occur. A tenant may think that they have returned the 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 you need 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 places a limit on how much a landlord can charge. How much the landlord can charge depends on the type of investment property they own.
If the property is private housing, then landlords are required to charge no more than 3X the price of one month’s rent. 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 your property is public housing, then the law requires landlords to charge 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 deposits are deemed refundable so long as the tenant abides fully by the contract. 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 the tenant so requests it. Otherwise, it isn’t necessary for you as a landlord to do so. Besides notice, tenants 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 deposits. In Northern Nevada, unlike some states, landlords 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 deposit is stored in an interest-earning account, landlords won’t have any obligation to pay tenants any accrued interests.
Can tenants use a surety bond in place of a security bond?
Yes, tenants can do so. That notwithstanding, landlords are under no obligation to accept the surety bond, nor can they force tenants to use a surety bond.
What can a tenant deposit be used for in Nevada?
Northern Nevada landlords can keep a portion or all of the tenant’s 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 tenants that do things 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 property.
• To cover loss in rent payments. A tenant’s failure to pay rent is a serious violation of the lease agreement. Yet, it’s probably one of the top problems experienced by North Nevada landlords.
• To cover excessive cleaning costs. Tenants are usually required to return the premises 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. Tenants are 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. Landlords must also provide their tenants with an itemized list of deductions when returning the remaining portion of the deposit.
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?
Landlords have 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 deposit, landlords have two options. One, to mail it to the tenant’s new address; or two, to 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. One, he or she can elect to transfer the deposit to the incoming owner and notify the tenant; or two, they can return the deposit to the tenant, 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. Laws change all the time, and this post may not be updated at the time you read it.