Learn about "security"--what a landlord can ask for and retain, how the money must be accounted for or returned to the tenant, and how the tenant can sue to recover it.
Nevada law allows a landlord to ask a tenant to pay "security." Generally speaking, security is money the tenant pays to protect the landlord in the event the tenant damages the rental property or defaults on some obligation. More specifically, security is any payment, deposit, fee, or charge to be used for:
- Remedying any default by tenant in the payment of rent;
- Repairing damages to the rental property caused by the tenant, other than normal wear; and
- Cleaning the rental property.
The only security that is nonrefundable is a reasonable amount for cleaning. A lease cannot characterize other security as nonrefundable. It also cannot waive or modify the tenant's rights regarding security. Any lease provision that tries to do either is void. (NRS 118A.242(8).)
Q&A - Security
How large of a security deposit can the landlord request?
The landlord of a residential rental property cannot demand or receive security (or a surety bond) that exceeds three months worth of rent. (NRS 118A.242(1).) So, for example, if monthly rent for the rental property is $850, the maximum amount the landlord can demand or receive from the tenant as security is $2,550 ($850 x 3 months).
Can a tenant post a surety bond instead of a security deposit?
As long as the landlord agrees, a tenant can post a "surety bond" as security. (NRS 118A.242(2).) (A "surety bond" is a written guaranty or pledge purchased from a bonding company to guarantee some performance.) But the landlord cannot require a tenant to obtain a surety bond instead of simply paying all or part of the security. (NRS 118A.242(3).)
If the landlord makes a claim against the tenant's bond, the landlord must give the tenant an itemized written accounting. (NRS 118A.242(4).) If the tenant disputes an item contained in the landlord's accounting, the tenant can send a written response disputing any items to the surety (the bonding company). (NRS 118A.242(5).) If the tenant sends the written response to the surety within thirty days after receiving the landlord's accounting, the surety cannot report the landlord's claim to a credit reporting agency unless the surety first sues the tenant and obtains a judgment. (NRS 118A.242(5).)
How does a tenant prove that tenant paid a security deposit or surety bond to the landlord?
The landlord must give the tenant a signed written receipt for the security deposit or surety bond (as well as for any other payments, including rent) if the tenant requests it. (NRS 118A.250)
What if the landlord will not give the tenant a receipt for the security deposit or surety bond?
If the tenant requests a receipt and the landlord refuses to give it, the tenant can stop paying rent until the landlord provides the requested receipt. (NRS 118A.250.)
What can the landlord deduct from the security deposit or surety bond?
The landlord can deduct from the security deposit or surety bond only such amounts as are necessary to:
- Remedy any default by tenant in the payment of the rent,
- Repair damages to the rental property caused by the tenant, other than "normal wear," and
- Pay the reasonable costs of cleaning the premises.
(NRS 118A.242(2) and (4).)
What is "normal wear"?
"Normal wear" is the kind of deterioration that occurs to the rental property without negligence, carelessness, or abuse of the rental property by the tenant, a member of the tenant's household, or any other person on the property with the tenant's consent. (NRS 118A.110.)
When must the landlord return the security deposit to the tenant?
When the tenancy ends for any reason, including eviction, the landlord has thirty days to either:
- Return the security deposit to the tenant, or
- Provide an itemized written accounting to the tenant showing how the deposit was applied.
The landlord must provide the refund or the accounting to the tenant by either:
- Handing it to the tenant personally at the place where the rent is paid, or
- Mailing it to the tenant at the tenant's present address, or If the tenant's present address is unknown, mailing it to the tenant at the tenant's last known address.
What if the landlord fails to return the security deposit within thirty days, or the tenant disagrees with the way in which the security deposit was used?
If the landlord fails or refuses to return the remainder of the tenant's security deposit within thirty days after the tenancy ends, the tenant can sue the landlord and request up to twice the amount of the security deposit. (NRS 118A.242(6).)
In deciding whether to award the tenant double the deposit, the court will consider:
- Whether the landlord acted in good faith;
- The course of conduct between the landlord and the tenant; and
- The degree of harm to the tenant cause by the landlord's conduct.
If the tenant paid the security deposit by purchasing a surety bond and the tenant disagrees with the way the landlord used the deposit, the tenant can send a written response disputing any items to the surety (the bonding company). (NRS 118A.242(5).) If the tenant sends the written response to the surety within thirty days after receiving the landlord's accounting, the surety cannot report the landlord's claim to a credit reporting agency unless the surety first sues the tenant and obtains a judgment. (NRS 118A.242(5).)
For information, click to visit Small Claims.
What if the landlord sells the rental property or loses it in a foreclosure sale?
When a rental property is sold (even if it is sold out of foreclosure), the previous owner is required to either (a) return the security deposits to the tenant or (b) transfer the security deposits to the new owner. (NRS 118A.244(1)-(2).)
In reality, that return or transfer frequently does not take place. Consequently, Nevada law gives the new owner who purchases the property "the rights, obligations and liabilities of the former landlord as to any securities which are owed" when the property is transferred. (NRS 118A.244(1).)
In other words, the new owner becomes responsible for the tenant's security deposits. And the tenant can sue the new owner for the return of the security deposits if necessary.