In Idaho, the collection and return of security deposits are primarily regulated under ID Code § 6-321. These laws provide a set of rules that Idaho landlords and property managers have to follow to protect all parties.
Maximum Security Deposit Charge in Idaho
In Idaho, there are no limits on how much a landlord may charge as a security deposit (or pet fee) if it is stated in the lease agreement. Landlords generally charge between one to two months’ rent as a security deposit.
Additional Pet Deposit: Under Idaho’s law, the landlord may ask for an additional pet deposit. However, people with disabilities who use service animals are entitled to full and equal access to housing. Thus, the tenant may not be discriminated against and the landlord may not require the tenant to pay extra to have a service animal. If the service animal causes damage to the rental unit, the tenant is liable to pay for any damages.
The Federal Fair Housing Act requires housing facilities to allow tenants who use service dogs and emotional support animals to have an equal opportunity to use and enjoy their home.
Security Deposit Withholding for Wrongfully Quit Dwellings in Idaho
If a tenant wrongfully quits the lease by abandoning the property without proper notice, the landlord may retain the entire security deposit towards the cost of re-leasing the property.
Allowable Deductions on Security Deposits in Idaho
The landlord can use the security deposit to make deductions after the tenant has vacated the premises. The security deposit should be used to cover non-standard damages such as:
- Unpaid rent; or
- Costs of damage caused by the tenant’s failure to comply with obligations as a tenant, including breaking lease terms, but not those considered to be standard wear and tear.
Can the deposit be used by the tenant as last month’s rent?
The deposit may only be used as the last month’s rent if both parties agree in the lease agreement. Otherwise, the security deposit should be handled separately from any rent balance left outstanding.
“Normal Wear and Tear” vs. Damage in Idaho
- “Normal wear and tear” is defined in Idaho Stat. 6 -321 as deterioration that occurs as a result of use for which the rental unit is intended and without negligence, carelessness, accident, or misuse or abuse of the premises or contents by the tenant or members of his household, or their invitees or guests.
It can include minor issues, such as gently worn carpets, loose door handles, fading wall paint and flooring, stained bath fixtures, lightly scratched glass and dirty grout that occur naturally as a result of the tenant using the property as it’s designed to be used.
- “Damage” refers to destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy which can affect usefulness, value, normal function of the rental unit. Pet damage (heavily stained and ripped carpet), broken tiles, hole in the wall, broken windows and missing fixtures are all examples of damage.
Check out our article on wear and tear vs. damage to get a better idea of the difference.
Tenants have a responsibility to maintain the property. The landlord can only charge the cost of repairs if the damage was caused by the failure of the tenant to comply with the obligations administered in the lease agreement. Some of these obligations include:
- Keeping the property clean and sanitary.
- Dispose of garbage and other waste in a clean and safe manner;
- Use all facilities (e.g., electrical, plumbing, heating, etc.) and appliances reasonably.
- Obey the landlord’s property regulations and use the
property for only lawful purposes.
- Prevent family and friends from damaging the property and prevent injury to others due to unlawful or dangerous activities on the property.
- Leave the premises in the same condition it was in when it was handed to the tenant.
The tenant must not:
- Change the locks on doors on the premises, except if necessary in an emergency.
- Destroy, damage, or remove parts of the premises.
- Unreasonably disturb the neighbor’s peaceful enjoyment of the premises.
- Engage in illegal activities involving prostitution, gambling, use of alcohol or controlled or prohibited substances, and other similar or illegal activities, or in activities promoting the same within the premises.
If the damage to the premises was caused by the tenant’s failure to comply with any of the above, then the landlord may take the cost of repairing it from the security deposit. The landlord must notify the tenant by a written notice of the violation. The written notice must either be mailed or delivered in person.
The landlord may also leave the written notice with a competent person at the tenant’s residence or place of business. The tenant has three days to fix the negligent damages. Failure to remedy the damages allows the landlord the right to recover the costs to pay for the tenant’s damages.
Returning Security Deposits in Idaho
Time Frame: An Idaho landlord has 21 days to return any unused portion of the security deposit along with a signed statement which has a detailed list of itemized damages that will be deducted from the security deposit. This time frame may be changed within the lease agreement, but it may not surpass 30 days at any time. This time period begins on the date of termination presented in the lease agreement. Written notice should be mailed to the tenant’s forwarding address.
Failure to Return Security Deposit as Required: If the landlord refuses or fails to return the security deposit within the 21 day limit, the tenant must demand the return of the withheld funds. They can do so by writing a letter to the landlord, sent via certified mail within three days of the limit being reached. If the security deposit is not returned within three business days, the tenant may proceed by taking the complaint to Small Claims Court. The tenant may sue the landlord and could possibly recover up to three times the full security deposit, plus any court and attorney’s fees.
Security Deposits and Tax Filing in Idaho
Whether a security deposit will be treated as taxable or not depends on if the deposit is used or returned.
Taxable Income: Security deposits are not automatically considered income upon collection at the beginning of tenancy. They only become taxable income when the landlord no longer has any obligation to refund them (such as for settling damages incurred). At this point they may also qualify as a write-off for tax purposes as well.
Reporting Security Deposit as Income: Whether or not security deposit should be reported as income and when to do so will depend on what it is being applied to or used as. Below are three simple rules the IRS has suggested to follow:
- If the deposit is forfeited due to a breach of the lease or applied to unpaid rent, then the amount kept should be declared as income in the year it was forfeited or applied.
- If the security deposit is used to cover expenses that are chargeable to it, then the landlord should only include the part of the deposit used as income if the landlord includes the cost of repairs as expenses. If the landlord doesn’t include them as expenses as a matter of practice, then there’s no need to include the part of the deposit kept to cover them as income.
- If there is an agreement between the parties to use the deposit or part of it as the final month’s rent, then the landlord should include it as income when the same is received.
Additional Rules & Regulations in Idaho
Receipt Requirements: The landlord is not required to provide a receipt for the security deposit in Idaho.
Security Deposit Holdings in Idaho: Idaho laws do not require landlords to hold security deposits separate from other funds unless the property is managed by a third-party.
Security Deposit Interest in Idaho: Idaho laws do not require landlords to provide interest on held security deposits.
New Property Owner’s Responsibility: If the original landlord decides to sell or transfer ownership of the rental property, the new landlord is required to assume responsibility for the security deposit funds and their return.
For additional questions about security deposits in Idaho, please refer to the official state legislation, ID Code § 6-321 (2021)