- Standard Limit / Maximum Amount: No limit (read more)
- Security Deposit Withholding: If the property is unlawfully quit without proper notice, the tenant may forfeit the right to have their security deposit returned. (read more)
- What Can Be Deducted: Unpaid rent, cost of damage to the unit (not wear and tear), and any other reason mentioned in the lease agreement (read more)
- Time Limit for Return: Within one-month of lease termination (read more)
- Penalty if Not Returned on Time: Forfeiture of right to retain the withheld portion of the deposit, plus damages of the greater of $300 or double the withheld funds, and legal fees if the withholding is willful and negligent. (read more)
Purpose. A security deposit provides landlords with protection against potential damages to the property resulting from tenant negligence or misuse of the rental dwelling. It may be used for rent recovery if previously agreed upon, but a security deposit is meant to go towards paying for non-wear damage that occurs during tenancy.
Legal Basics. Louisiana landlords can charge any amount as a security deposit if it is listed in the lease agreement. It must be returned within one month days of lease termination, otherwise the landlord will forfeit the right to retain the withheld part of the deposit and be subject to $300 or double the withheld sum in penalties to the tenant. Damages may only be from tenant negligence and may not include normal wear and tear occurring as a result of regular usage.
Maximum Security Deposit Charge in Louisiana
In Louisiana, there are no limits on how much a landlord may charge as a security deposit as long as it is stated in the lease agreement.
Additional Pet Deposits. Landlords generally charge between one to two months’ rent as a security deposit, with another month’s rent for a pet deposit. Under Louisiana’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 Louisiana
If a tenant wrongfully quits the lease by abandoning the property without proper notice before the end of the lease, the landlord may retain the entire security deposit towards the cost of re-leasing the property.
Allowable Deductions on Security Deposits in Louisiana
The landlord may only use the security deposit to make deductions after the tenant has vacated the premises. The security deposit should be used to cover:
- Unpaid rent; or
- Costs of damage caused by the tenant’s failure to comply with obligations as a tenant 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 be used as the last month’s rent only if agreed upon in the lease agreement. Otherwise, the security deposit is to be handled separately from any rent payments.
“Normal Wear and Tear” vs. Damage in Louisiana
- “Normal Wear and Tear“ refers to the 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 and 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.
The landlord can only charge the cost of repairs if the tenant does not comply with specific obligations related to their lease agreement. To fulfill the tenant’s responsibility while under the lease agreement, the tenant must:
- Keep the premises, including all plumbing fixtures, clean and safe;
- Dispose of garbage and other waste in a clean and safe manner;
- Use all facilities (e.g. electrical, plumbing, heating, etc.) and appliances reasonably;
- Comply with the maximum number of persons allowed to occupy the premises;
- Promptly inform the landlord of any damages or repairs; and
- Leave the premises in the same condition it was in when it was handed to the tenant.
Additionally, the tenant may not:
- Alter the premises without obtaining permission from the landlord;
- Negligently or deliberately destroy, damage, or remove parts of the premises;
- Unreasonably disturb the neighbor’s peaceful enjoyment of the premises; and
- 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 any damage occurs as a result of the tenant’s failure to comply with any of the above obligations, then the landlord may take the cost of remedying it from the security deposit.
Returning Security Deposits in Louisiana
Time Frame: A Louisiana landlord has one month to return any unused portion of the security deposit along with an itemized list of damages deducted. This period begins on the date of termination presented in the lease agreement. The landlord must send the tenant an itemized statement of accounting of the funds that will be retained and a detailed description of the reasons for the deduction should be mailed to the tenant’s forwarding address.
Failure to Return Security Deposit as Required: If the landlord refuses to or fails to return the security deposit within one month of lease termination or within one month of tenant’s demand for a return of wrongfully deducted funds, they are considered to be in willful failure. This means that the tenant stands to recover the withheld balance plus up to the greater of double the retained deposit or $300 in damages, plus any legal fees associated with recovering the deposit in court.
Security Deposits and Tax Filing in Louisiana
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 Louisiana
Receipt Requirements: The landlord is not required to provide a receipt for the security deposit in Louisiana.
Security Deposit Holdings in Louisiana: Louisiana laws do not require landlords to hold security deposits separate from other funds.
Security Deposit Interest in Louisiana: Louisiana laws do not require landlords to provide interest on held security deposits.
New Property Owner’s Responsibility: If the original landlord decides to transfer the property to a new owner during the term of a lease, the original landlord must also transfer the security deposit. When the transfer is completed, the original landlord is relieved of liability for the security deposit, and the new landlord is responsible for returning the tenant’s deposit when the lease is terminated.
For additional questions about security deposits in Louisiana, please refer to the official state legislation, Louisiana Landlord-Tenant Statutes