Landlords who own rental property in the state of Utah should be aware of Utah’s landlord-tenant laws, including rules for the security deposit. Understanding and following these rules can help protect you in case you have a security deposit dispute with your tenant. You should also check with your local government to see if additional rules may apply. Here are some frequently asked questions about Utah’s security deposit law.
For the original text of the full law that governs security deposits in the state of Utah, please consult Utah Code Annotated §§ 57-17-1 to 57-17-5.
Security Deposit Limits
The state of Utah does not place any limit as to the maximum amount a landlord can charge a tenant as a security deposit. However, it is common to charge between one and two months’ rent as a security deposit. Any more than this may deter tenants from renting your property. Any less than this may not be enough to protect you if a tenant breaches their lease agreement.
Charging a Nonrefundable Deposit
In Utah, landlords may charge a nonrefundable deposit. In order to do so, the landlord must clearly state in writing what portion of the deposit is nonrefundable. This statement can be written into an existing lease agreement or it can be a separate document. The tenant must read and sign this document before giving the deposit.
How to Hold Security Deposit Funds
There are no specific rules for how landlords in the state of Utah must store tenants’ security deposits. They do not have to be put into an account which is separate from the landlord’s funds nor do they have to accumulate interest.
Written Security Deposit Receipt
In Utah, a landlord does not have to provide a tenant with written notice after receiving a tenant’s security deposit. However, landlords should include this as part of the lease agreement to help avoid any disputes in the future over the amount of the security deposit and when it was deposited.
Keeping a Tenant's Deposit
In Utah, a landlord can keep all, or a portion of, a tenant’s security deposit to cover:
Unpaid rent
Damage in excess of normal wear and tear
Costs to clean the unit
Other breaches of the lease agreement
Utah Walk-Through Inspection Requirements
Utah law does not require landlords to perform walk-through inspections prior to a tenant’s move-out.
However, these inspections are beneficial to landlords. They allow the landlord to document the condition of the rental unit prior to tenant move-out. The landlord can notify the tenant if any deductions will be taken from their security deposit for damage to the unit. This gives the tenant time to remedy the damage or at least mentally prepares them for the deductions that will be taken.
Returning the Security Deposit in Utah
Utah law is specific on the actions a landlord must take if withholding or making deductions to a tenant's security deposit. There are also specific actions that are the responsibility of the tenant to complete when they move out of a rental property.
Written Notice
If a landlord in Utah intends to make deductions from a tenant’s security deposit, they must include a written itemized statement when returning the portion of the security deposit that is owed back to the tenant. This notice must state what deductions have been taken from the deposit and the amount of each deduction.
Tenant Forwarding Address
It is the tenant’s responsibility to provide the landlord with the address where the security deposit and the itemized statement, if necessary, should be delivered or mailed. The tenant must provide the landlord with this information within 30 days of move-out.
30 Days After Move-Out or 15 Days After Receipt of Forwarding Address
Utah landlords have 30 days after tenant move-out or 15 days after receiving a tenant’s forwarding address, whichever is later, to return the portion of the security deposit owed back to the tenant. If the landlord is keeping any of the security deposit to cover damage to the unit, the landlord has 30 days after tenant move-out or 30 days after receiving a tenant’s forwarding address, whichever is later, to return the portion of the security deposit owed back to the tenant. The deposit plus the written itemized list, if necessary, can be hand-delivered or it can be mailed to the address the tenant has provided.
Wrongful Withholding
If a Utah landlord fails to return a tenant’s security deposit within the time specified, fails to provide the tenant with a written itemized list, if necessary, or wrongfully withholds all or a portion of a tenant’s security deposit, the tenant may be awarded their full security deposit and up to $100 in penalties plus court costs.
Selling Property With a Tenant in Place
If you sell your property or the property changes hands while you are still in possession of a tenant’s security deposit, you can either:
Transfer the security deposit to the new owner, less any allowable deductions, and notify the tenant of the name and address where their deposit is now being kept
Or
Return the security deposit to the tenant, less any allowable deductions, and notify the new owner that the security deposit has been returned to the tenant.
This article is not intended as legal advice and shouldn’t be construed as such. If you have questions about security deposit laws, please contact an attorney.