Utah Security Deposit Law

Maximum Security Deposit Amount

Maximum amount: When collecting a security deposit, Utah landlords may charge any amount they wish. Utah law does not impose a limit, regardless of furnishings or the number of units a landlord controls.

Pet deposits: Landlords can charge a pet deposit as they see fit, but if they intend to make any part of that deposit non-refundable, the lease must state those conditions. Landlords cannot charge pet rent or pet deposits for service animals or emotional support animals (ESAs).

Handling Damage Deposits

The security deposit is considered the tenant’s property during the tenancy, until (or if) the landlord retains a portion when the tenant moves out to cover legally allowed expenses. In other words, landlords must handle the funds appropriately to comply with Utah’s security deposit law.

Security deposit storage: Utah law does not require landlords to store security deposits in a specific account type. Additionally, the law doesn’t stipulate that landlords must keep the deposit separate from their personal funds, though it’s considered a best practice.

Interest-bearing account: Utah does not require landlords to store security deposit funds in an interest-bearing account, nor pay the tenant accrued interest if they do.

Receipt: While it’s always a good idea to document the transfer of funds from tenants to landlords, Utah doesn’t require landlords to provide a security deposit receipt.

Documentation: Utah does not require specific documentation when collecting a security deposit, including a move-in checklist. However, a move-in form is a great way to compare notes with your tenant on the current condition of the rental property. The benefit of using one of these reports is to eliminate security deposit disputes between landlords and tenants.

Ownership transfer: No specific law dictates what happens to the deposit during a transfer of ownership. However, state precedent suggests that the previous owner can return the deposit to the tenant, minus any necessary deductions, and the new owner can collect a new security deposit. Or, the previous owner can transfer the full deposit amount to the new owner, notifying the tenant of the transfer.

Deductions

Once a tenancy ends, Utah security deposit law allows landlords to deduct funds to cover certain costs, unpaid expenses, or damage.

Utah landlords can deduct funds to cover

Unpaid rent: If the tenant leaves the unit with a balance left on their account, the landlord may deduct funds from the deposit to cover the debt. Landlords who use TurboTenant can easily track rent payments for all their rental units and collect rent online to minimize late payments.

Damage beyond normal wear and tear: Some wear and tear is expected during a tenancy. However, landlords can use security deposit funds to repair excessive damage. Some examples of excessive damage include: large holes in the walls or ceiling, unauthorized painting, stained or torn carpeting, missing appliances, or broken windows.

Extensive cleaning. Landlords should expect some cleaning when a tenant moves out. However, excessive filth may require a more significant cleaning effort, which is a deductible allowance in Utah.

Unpaid costs or fees listed in the lease agreement. Like unpaid rent payments, if the lease agreement requires tenants to pay other fees (like parking or utilities), landlords can satisfy those unpaid balances with funds from the deposit. For these to represent legal deductions, the lease must list the relevant fees and expectations.

Landlords are not allowed to deduct for

Normal wear and tear. Any damage caused by the regular use of the rental unit cannot be repaired using funds from the security deposit. This includes: nail holes in the wall, scuff marks on walls or baseboards, faded paint, and worn carpet.

Routine property maintenance or improvements. Landlords must pay for anything under routine maintenance or property improvements with their own funds. These are not considered deductible expenses. New paint, appliances, common area repairs, a new garage, or an addition to the unit are all non-deductible expenses.

Damage listed on the move-in checklist. If the landlord and tenant signed a move-in checklist detailing a specific defect in the unit that remained unrepaired during the tenancy, the landlord cannot use the deposit funds to fix it.

Penalties or fees not included in the lease. Landlords are not allowed to charge fees that were not clearly listed in the lease agreement after a tenant moves out.

Return Timeline

Timeframe: Utah security deposit law indicates that the landlord must refund the deposit to the tenant within 30 days, regardless of whether the landlord deducts funds.

Deduction tracking: When the landlord returns the remaining security deposit after deductions, the money must be accompanied by a written notice that includes an itemized list of each deduction, the reason for each deduction, and the associated cost.

Itemized deduction notification: Utah law does not specify how landlords must send the itemized deduction notification to the tenant, nor does it dictate how they should return funds. However, both the notification and the funds must be provided to the tenant within 30 days of the end of the tenancy.

Penalties: If a landlord returns the security deposit after the 30-day window or deducts money for incorrect reasons, they may face a civil penalty of $100. Furthermore, the landlord will be required to return the full amount of the original security deposit to the tenant, regardless of any unpaid rent or deductions. Additionally, the tenant may recover court costs and other damages based on the circumstances.

Handling Disputes

Move-in/move-out checklist: Even though Utah law doesn’t require a move-in checklist, it’s a great tool to minimize confusion and misunderstandings when a tenant moves out. Taking inventory of the property’s physical condition, including key features and detailed photographs, can prevent disputes before they go too far.

Tenant challenge: If a tenant does challenge your deductions, gather all of your documentation and evidence to support your cause. Essential documents include the move-in checklist, any photos you may have, and the lease agreement. You could offer the tenant a chance to walk through the property with you so you can explain your case, or you might even want to offer to negotiate a settlement if it seems like they might escalate their claim further. Either way, the more evidence and documentation you can gather will help to protect you at all stages of a tenant challenge.