Key Takeaways
As a landlord, understanding security deposit laws in your area is crucial.
Without a proper grasp of security deposit laws, you could end up in legal trouble.
Partnering with a property management company can streamline your rental efforts and ensure legal compliance.
Savvy landlords know how important having a financial safeguard against potential losses is essential for success. A security deposit acts as a form of insurance against any financial risks that can arise when renting out a property.
You can use the security deposit to cover things like:
Cost of damage exceeding normal wear and tear.
Unpaid rent, utility bills, or late rent fees.
Excessive cleaning fees.
If you don’t collect a security deposit, you’d have to foot such bills yourself. That can have a severe impact on your rental’s return on investment (ROI).
But with this right comes certain responsibilities. In Nevada, these are spelled out under Chapter 118A of the state’s Revised Statutes. With that in mind, here are the basics of the Nevada security deposit law by Ravago Group Properties.
Maximum Security Deposit Limit
There is a limit to how much security deposit you can ask for in Nevada. The state caps the maximum amount at the equivalent of 3X rent. If charging a monthly rent amount of, say, $1,500, then that would bring the maximum amount to $4,500.
Alternatively, you could ask the resident for a surety bond instead of (or in addition to) the security deposit. However, the security deposit together with the surety bond must not exceed the equivalent of 3 months’ rent.
Please note that you cannot ask the resident for a surety bond as the only option. You must give them an option to provide a security deposit instead.
Additional Pet Deposits
Landlords in Nevada can ask for additional pet deposits, except if the resident has a service dog or an emotional support animal. That said, the total security deposit amount must not exceed the state’s limit of three times the monthly rent.
Trying to exceed the limit by using another name, like “pet deposit” or “damage deposit,” would be illegal. You can, however, charge residents with pets a monthly premium for the privilege of keeping the animal on the property.
Move-In Requirements
Nevada requires landlords collecting security deposits to provide residents with a written lease agreement. The document must include a signed inventory and describe the rental unit’s move-in condition. You must also state the conditions the resident must leave the unit to get a refund of their deposit.
And if you’d like to charge a non-refundable cleaning fee, you must state it in the rental agreement. But other than a cleaning fee, the rest of the security deposit amount must be refundable.
Sale of Rental Property
Once you sell a rental property in Nevada, you must do either of two things regarding the security deposit.
One, you can transfer the deposit, minus any allowable deduction, to the new owner. You must then notify the resident of the action and inform them of the incoming landlord’s name and contact details.
The other option is to return the security deposit to the resident, minus any allowable deduction. You must then notify the incoming landlord of doing so in writing.
Security Deposit Deductions
Landlords can make certain deductions from a resident’s security deposit. But, you must ensure the deductions are reasonable and in good faith. The allowable deductions per the Nevada security deposit laws are as follows.
Unpaid rent
Late fees
Cost of damage exceeding normal wear and tear
Maintenance vendor fees
If the security deposit doesn’t cover such costs, you can seek additional damages from the former resident. Even if that would mean suing them in a small claims court.
Normal Wear and Tear vs. Damage
This deduction is usually the cause of most conflicts between landlords and residents. That’s why understanding and familiarizing yourself with the two terms is essential for minimal conflicts and misunderstandings.
Nevada defines normal wear and tear as property damage that occurs without negligence, carelessness, or abuse. Common examples are lightly dirtied grout, lightly scratched glass, loose door handles, or stained bath fixtures.
Damage, on the other hand, is deterioration that exceeds normal wear and tear. It occurs due to a resident’s negligence, carelessness, or abuse of the rented premises. Examples include a smashed bathroom mirror, a missing door lock, holes in the wall, and broken windows.
Security Deposit Returns in Nevada
After a resident moves out after their lease is over, you must return the deposit no later than 30 days. If making deductions, you must send the remaining amount, plus an itemized list of deductions, to the resident’s last known mailing address.
Conclusion
While you have a right to charge a security deposit (which you should), these are the responsibilities you must abide by. These are essential in ensuring you stay legally compliant and have a smooth landlording experience.
If you have a question or need expert property management help, look no further than Ravago Group Properties. We have been a leader in property management and real estate for almost 30 years now. We know exactly what goes into successful landlording in Las Vegas and the surrounding areas. Get in touch to learn more!
