As a busy landlord, it's easy to overlook the proper management of security deposits. However, neglecting this crucial aspect can have negative consequences, such as a two-hundred-dollar penalty or being known as an unfair landlord.
To preserve your reputation, get familiar with Mississippi's tenant rights. By doing so, you can always charge a fair price for security deposits and avoid any legal issues when it's time to return them.
Here's everything you need to know about security deposit laws in Mississippi so you can have a positive relationship with all your renters.
How Much Can a Landlord Charge for a Security Deposit?
Unlike most states in the US, Mississippi has no limit on how much a landlord can charge for a security deposit.
While you can set the price however you like, we encourage you to choose a reasonable amount. Most states have a security deposit that's worth between one and two month's rent. Maybe you can charge a bit more, but we recommend staying within that range.
Security Deposits and Receipts
In Mississippi, landlords do not have to give tenants a receipt for their security deposit payment.
Even so, you may want to consider doing it anyway. It allows you to keep a record of your payments, which can help if there's ever a dispute regarding the security deposit.
Storing Security Deposits
No state law stipulates how security deposits must be held. You can store them in your regular bank account along with other personal money.
What Can Security Deposits Be Used For?
The most common use for security deposits is unpaid rent, late fees, and charges for allowing pets. Unpaid utilities, such as water and electricity, can be covered by the security deposit too.
Landlords in Mississippi can also use the security deposit to repair any damages beyond normal wear and tear. Holes in the wall, missing appliances, and broken windows are examples of damages you can deduct.
If the tenant leaves the rental property in an excessively dirty condition, you can deduct the cleaning costs and maintenance services as well. However, each expense must be to restore the rental property to what it was before the renters moved in.
Please note that security deposit deductions must be reasonable and properly documented. The law requires you to provide tenants with an itemized list of deductions.
Returning Security Deposits
You must return the remaining balance of the security deposit within forty-five days of the tenant vacating the rental property. The countdown starts after you have repossessed the rental.
Usually, tenants will make a formal request for their security deposits. This often takes the form of a written demand letter.
Managing Security Deposits Like a Pro
The good news is that you're free to charge whatever you want for security deposits. The bad news is that you can be sued if you don't handle these deposits correctly. Be sure to have the security deposit ready when your tenant requests it, and only make deductions for what's legally allowed.
If navigating security deposit laws in Biloxi, MI is too time-consuming, call PMI Biloxi for help. We offer property management services that handle your tenants and their security deposits. Get in touch with our team so you can stay compliant!