Can I Use My Security Deposit Towards Last Month’s Rent?

Many tenants assume that when they pay a security deposit to rent a property, they don’t have to pay last month’s rent. Since the amount is often similar if not the same as the rental amount, it’s normal to make that assumption but that’s not the case. Unless your lease specifically stated that any deposit money you put down gets applied to the last month’s rent, then you should assume you have to pay your last month’s rent.

What happens if I don’t pay the last month’s rent?

A few things can happen. A late fee will most likely be added to your account since you didn’t pay rent on time like you were supposed to. If you still don’t pay after the grace period expires, then the landlord can start the eviction process. Depending on how busy the courts are with evictions, you may end up moving out at the end of the lease before the eviction through, but you may still have a blemish on your record, additional fees may apply, and you will almost definitely not be getting a good reference later when you try to rent places if they contact your landlord. You may even have the place you’re trying to move into fall through if you default on the last month’s rent and your landlord discloses it to your potential new landlord or property management company.

Your security deposit may not cover all your move-out expenses

When the security deposit gets applied to last month’s rent and additional fees are added like charges for damage to the property or cleaning that is needed when you move out, there’s a good chance your security deposit may not cover everything. If you don’t pay the difference between what you owe and what your deposit covers, then the landlord can sue and/or send you to collections which may incur more fees while also damaging your credit.

What can I do if I cannot pay last month’s rent?

You might need the money for moving expenses or to put down as a security deposit or pay fees to start the lease on your next rental. If you cannot pay last month’s rent in full and on time, then you should contact your landlord immediately and see if you can work out payment arrangements and possibly save on some of the fees, eviction, and credit damage. 

If you leave owing money and don’t pay it

The landlord can go after one or all the tenants to try and collect what is owed. If you have a co-signer, then this person may also be held reasonable for your debt. If you have a co-signer, then this might be a good person to ask for a loan to cover the last month’s rent since ultimately, he or she could be held responsible. That way the rent will be paid on time without incurring additional fees and you can work out a payment arrangement with your co-signer.

Every landlord is different, and landlords are not obligated to work with you. You signed a legally binding contract, your lease agreement, and you are the one asking them to modify terms for your situation; however, it’s usually in their best interest so most will work with you if your proposal is reasonable. Let your landlord know what you can pay now and the timeline of when you’ll be able to pay the balance and see if she agrees or has a counterproposal that will work for both parties.