Almost every rental agreement includes a security deposit payment. It is standard practice for landlords in the US and required by most property management companies.

Security deposits are a form of assurance as a landlord that your renter agrees to adhere to the rules of their lease agreement and to respect the property during their tenancy.

It also provides a financial safety net in case of unpaid rent or damages for which the tenant is responsible.

You can use the money from the security deposit to pay for repairs and recover the cost of a missing rent payment, but the receipts that go along with it are important.

A landlord should not only provide receipts for any payments made using the deposit funds but also a security deposit receipt for the upfront payment itself.

In this guide, we cover why this receipt is essential and what it should look like.

To make things easier, DoorLoop provides a free security deposit receipt template, which you can use to create your own. If you want to skip right to the template, you can find it at DoorLoop Forms.

What Is a Security Deposit Receipt?

A security deposit receipt is a confirmation of payment from a tenant to a landlord. It covers the amount of money paid (usually the equivalent of two month's rent) and the terms of the payment.

This is the legal proof to confirm the deposit was received and the purpose of having it.

According to most state laws, the security deposit should be held in a separate account. You do not usually have to pay interest on a security deposit.

What Are Security Deposits Used For?

There are some debates over what security deposit funds should and should not be used for, which is another reason why providing a detailed receipt is so important for landlords.

You should be clear from the beginning what the security deposit is there for and in what circumstances it will be used, but you should also be fair.

Taking money for normal wear and tear is not the best practice and is likely to put tenants off. Cleaning costs before move-outs can be accepted as long as they are reasonable.

Unreasonable demands listed in a security deposit receipt may change a tenant's mind. If you don't provide a receipt at all, they could make a claim against you if they feel you are unfairly withholding their money.

Here are some of the main things landlords include in the agreed list of deductions. Other losses may be applicable, but these are the most common ones.

To Cover Unpaid Rent

Two month's rent is the standard amount for a security deposit in the US.

That means that you have two additional payments covered in advance if the end of the lease term arrives and your tenant doesn't pay.

It also helps if you have to terminate a lease agreement due to missed rent payments by covering some of your losses.

To Replace Lost or Broken Items

Accidents happen, but it shouldn't be you who has to pay for them. If something you provide for your tenants in the rental property gets broken or misplaced, it is normal to use the security deposit to replace it.

Small appliances, decorative items, furniture, and fixtures are just some examples of things that could be lost or broken by your tenants.

You can use your discretion if it is something small and insignificant, but anything that is not due to normal wear can be claimed back.

To Pay for Damage Repairs

It is not only items that can lead to expenses as a landlord- the property itself can sometimes take a hit. To protect your investment and avoid unexpected repair bills, you can charge the damage back to your tenant through their security deposit.

Even in an unfurnished property, there are things that can be damaged. If your tenants cause damages beyond the realm of normal wear, you are within your rights to take the repair cost out of their deposit.

As long as you clearly state your intention to pay for such damage using the security deposit in the initial receipt and provide proof of the damage, your tenant should not be able to dispute the decision.

Why Is It Important to Have a Receipt for a Security Deposit Payment?

Security deposit laws vary between states, but providing this receipt is a general legal requirement nationwide. It is best practice to do this whether or not your state laws require it, as it can save you and your tenants legal troubles later.

Without a receipt, you leave yourself open to disputes about what it was or was not intended for. Both you and your tenant agree to the terms of the deposit and document them on the receipt.

That way, there is no confusion later.

Other Receipts to Know About

As well as the initial receipt, many states also require landlords to issue receipts for any cash amounts deducted from the deposit. If this happens during the tenancy, the receipt can be issued at the time.

In cases where the repairs or cost recoveries are taken at the end of the lease, the receipt should be given after collecting the last month's rent.

You must also provide a security deposit return letter. The return letter is provided when your tenant moves out, and you give them back what remains of their deposit.

It is in your best interest to do this, as it states that you are refunding the deposit and details how much they are getting and why.

The letter includes any deductions and the reasons for them, complete with evidence of why it was taken. If you are withholding any funds, you must notify your tenants in this return letter and state why.

Again, providing this protects you from disputes and legal issues. You can find a free deposit return letter template through DoorLoop.

What Is Included in a Security Deposit Receipt?

Now, let's look at the things that go into a security deposit receipt. Remember, you can find a free state-specific template for a rental property security deposit receipt using DoorLoop Forms.

There are six key components in a security deposit receipt.

Security Deposit Amount

This is a receipt of payment at the end of the day, so the first and most important thing to state is the exact amount of money taken.

Your receipt should include the total sum and the rental period it applies to (two month's rent, for example).

Date of Payment

Next, include the date the payment was received. This date must be accurate in case anything comes up later.

That way, you can easily look back at the relevant bank statement to show the payment going into your holding account.

Intended Purpose

This is the part you really need to be clear on. What you write here can either make things simple or complicated, so it is best to be as detailed as possible.

You can start by stating that the payment is a security deposit received for the unit (specify the address) and is to be held as an assurance until the end of the lease.

Next, you should clearly state the circumstances under which funds will be deducted from the deposit. This should include any specific lease breaches or damages that you intend to charge for should they occur.

The more detail you go into, the better, as it leaves less room for disputes later. If you simply say 'deductions will be made for damage to the property,' your tenant could argue about what that means.

List the damages you mean- and be sure to include unpaid rent.

Contact Details of Payment Recipient

If you personally received the payment, you should provide your contact details (preferably the ones associated with your rental property business).

The same applies if someone else received the payment on your behalf- an agency, a different member of staff in your organization, or an independent holder. If this is relevant in your case, put their details instead.

Landlord Details

Sometimes, it is not the landlord who handles security deposits.

Whether you are a property manager working with someone else's unit or you use an agent to lease out a property you own, the details of the actual owner and landlord must be included.

Relevant Signature

The landlord or agent managing the security deposit and issuing the receipt should sign and print their name on the document to make it official.

How to Use DoorLoop Forms to Manage Your Security Deposit Receipts

DoorLoop provides a range of helpful forms and templates to make an owner's life easier. To find your free security deposit receipt template, head to DoorLoop Forms.

Filter your search by the type of form or by state to find the right pack for you. You can download everything you need completely free of charge!

Find out more by scheduling a free DoorLoop demo today.


In an ideal world, security deposits should be taken, held, and returned- in full- without complications, but that doesn't always happen.

People fail to pay rent, things get damaged, and lease agreements are otherwise broken.

To cover yourself and avoid disputes, it is vital to issue a clear and detailed security deposit receipt.

Save yourself time and effort by using DoorLoop Forms for your free security deposit receipt for rental property owners.


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David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!