At Deca Property Management, we assist with managing the security deposit process to ensure it is handled properly and in compliance with Missouri law. From collecting and holding deposits to issuing refunds or providing itemized deduction lists, we’re here to guide you through each step. Our goal is to support you in protecting your investment while ensuring everything is managed smoothly and in line with legal requirements.
Common Security Deposit Mistakes
Missing Security Deposit Refund Deadline
In Missouri, state law requires that security deposits be returned, or the tenant receives an itemized list of deductions, within 30 days of returned possession. Oftentimes, this deadline is overlooked, and some property owners or managers may miscalculate the timeline, especially when coordinating move-out inspections, repairs, or vendor scheduling. However, failing to return the deposit or provide a detailed, written explanation of deductions within this 30-day window can result in serious consequences. Under Missouri law, tenants may be entitled to recover up to twice the amount wrongfully withheld, plus court costs.
Making Illegitimate Deductions
Property owners or managers sometimes make the mistake of deducting for items considered “normal wear and tear.” These include minor scuffs, faded paint, and gently worn carpets which occur with general use. Missouri law does not allow these types of damages to be deducted from a security deposit. Instead, deductions must be limited to issues such as neglect, misuse, or intentional damage. Security deposits can also be applied to cleaning costs, such as carpet cleaning, if the tenant left the property in poor condition and provided the rental agreement discloses to the tenant that he or she may be liable for these costs. After damages and cleaning costs, the security deposit can be applied to unpaid rent and utility bills if applicable.
Not Conducting a Proper Move-In/Move-Out Inspection
Skipping or inadequately documenting move-in and move-out inspections is one of the most common—and costly—mistakes property owners can make. Without a clear, written record of the property’s condition at the beginning and end of a lease, it becomes extremely difficult to justify any deductions from the security deposit. This lack of documentation often results in disputes that are hard to defend legally. Additionally, under Missouri law, tenants have the right to be present during the move-out inspection. Property owners must notify tenants of the inspection date and time in advance. Failing to provide this opportunity can further undermine any deductions made and increase the likelihood of a legal challenge.
Improperly Holding Security Deposits
In Missouri, the maximum deposit allowed is two months’ rent. Landlords must place security deposits into a government-insured bank or escrow account. The funds can collect interest, which the account holder is entitled to. Generally, it is recommended that security deposits be held in a separate account from operating or personal accounts to avoid accounting headaches and legal risk.
Failing to Turn Over Uncashed Refunds to the State
If a tenant never cashes their refund check or cannot be located, the owner is not entitled to keep those funds. It must eventually be turned over to the state as unclaimed property. Many property managers or owners are unaware of this obligation, potentially leading to compliance violations.
Smart Strategies to Avoid Security Deposit Mistakes
Stay Ahead of Deadlines with a Clear Timeline
We maintain a detailed schedule of lease end dates, inspections, and refund deadlines, ensuring every deposit is returned or accounted for within the required 30-day window. Timely processing helps avoid penalties and builds tenant trust.
Understand Legitimate Deductions
We follow Missouri’s legal guidelines closely to ensure only appropriate deductions are made from a tenant’s security deposit. Our team distinguishes between legitimate damage—such as broken fixtures, a hole requiring drywall repair, or excessive filth—and standard wear and tear, which is never deducted. When deductions are necessary, we provide a detailed, itemized statement supported by clear documentation.
Conduct Thorough Inspections
We perform detailed move-in and move-out inspections using standardized checklists and photographic documentation to ensure accuracy and fairness. This also provides transparency for all parties. With every inspection, we document the property’s condition thoroughly—before and after tenancy—so there are no surprises when it’s time to return the deposit. Our inspection process protects property owners from disputes and ensures tenants feel confident their deposit is handled fairly.
Hold Security Deposits Correctly
Deca Property Management defaults to holding security deposits in a dedicated security deposit escrow account to ensure funds are properly safeguarded and readily available for timely return within the required 30-day period. These deposits are held in a non-interest-bearing account.
Comply with Unclaimed Property Laws
If a tenant cannot be located or their refund goes uncashed, we handle the legal process of turning over the funds to the state as unclaimed property. This ensures full compliance and avoids long-term liability.
At Deca Property Management, we handle the complexities of security deposits, so property owners don’t have to. From tracking deadlines to making accurate deductions and complying with unclaimed property laws, every step is managed professionally and in full compliance. The result: your investment is protected, tenant relationships stay strong, and costly mistakes are avoided.
