In Mississippi, the collection and return of security deposits are primarily regulated under MS Code § 89-8-21. These laws provide a set of rules that Mississippi landlords and property managers have to follow to protect all parties.
Maximum Security Deposit Charge in Mississippi
In Mississippi, 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. Landlords generally charge between one and two months’ rent as a security deposit.
Additional Pet Deposits: Under Mississippi’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.
Allowable Deductions on Security Deposits in Mississippi
The security deposit may only be used for certain remedies, which may only be charged after the tenant moves out. Potential uses of the security deposit include:
- Unpaid rent.
- 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.
- Cleaning costs after termination of the tenancy.
- Expenses incurred due to default of lease agreement.
Landlords may adopt rules or regulations from time to time and are enforceable. The rules which are either adopted or amended after the rental agreement has been signed may be enforced with reasonable notice given to the tenant.
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 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 Mississippi
- “Normal Wear and Tear” is defined 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 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 damage was caused by the failure of the tenant to comply with specific obligations. To comply with positive obligations under the said rule, the tenant must:
- Keep that part of the premises that the tenant occupies and uses as clean and as safe as the condition of the premises permits.
- Dispose all ashes, rubbish, garbage and other waste in a clean and safe manner in compliance with community standards.
- Keep all plumbing fixtures in the dwelling unit used by the tenant as clean as their condition permits.
- Use in a reasonable manner all electrical, plumbing, sanitary, heating, ventilating, air conditioning and other facilities and appliances, including elevators, in the premises.
- Not deliberately or negligently destroy, deface, damage, impair or remove any part of the premises or knowingly permit any other person to do so.
- Conduct and require other persons on the premises with the tenant’s consent to conduct themselves in a manner that will not disturb the neighbors’ peaceful enjoyment of their premises.
- Inform the landlord of any condition of which the tenant has actual knowledge which may cause damage to the premises.
- To the extent of the tenant’s legal obligation, maintain the dwelling unit in substantially the same condition, reasonable wear and tear excepted, and comply with the requirements of applicable building and housing codes materially affecting health and safety.
- Not engage in any illegal activity upon the leased premises as documented by a law enforcement agency.
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.
Returning Security Deposits in Mississippi
Time Frame: A Mississippi landlord has 45 days 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.
Written Notice: The landlord must provide the tenant with a written notice of any deductions of the security deposit to repair any damages to the premises. The written notice must include a list of itemized amounts of damage. The remainder of the security deposit (if any) shall be returned to the tenant within 45 days after the end of tenancy.
Failure to Return Security Deposit as Required: If the landlord refuses or fails to return the security deposit within the 45-day limit, the tenant stands to recover actual damages plus $200, plus any legal fees associated with recovering the deposit in court.
Security Deposits and Tax Filing in Mississippi
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:
- 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 Mississippi
Receipt Requirements: The landlord is not required to provide a receipt for the security deposit in Mississippi.
Security Deposit Holdings in Mississippi: Mississippi laws do not require landlords to hold security deposits separate from other funds.
Security Deposit Interest in Mississippi: Mississippi laws do not require landlords to provide interest on held security deposits.
For additional questions about security deposits in Mississippi, please refer to the official state legislation, Mississippi Landlord-Tenant Statutes.