In Wyoming the collection and return of security deposits are primarily regulated under the WY Stat § 1-21-1208. These laws provide a set of rules that Wyoming landlords and property managers have to follow to protect all parties.
Maximum Security Deposit Charge in Wyoming
In Wyoming, there are no limits on how much a landlord may charge as a security deposit (or pet fee). Landlords generally charge one to two months’ rent as a security deposit.
Additional Pet Deposits. Under Wyoming’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 Wyoming
The landlord may use the security deposit to make deductions only after the tenant has vacated the premises. The security deposit should be used to cover:
- 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 agreed to under the rental agreement.
- Any other costs declared in the rental agreement.
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 Wyoming
- “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 their obligations as a tenant. Wyoming provides specific rules that must be followed as a tenant.
To comply with these obligations, the tenant must:
- Maintain the residential rental unit occupied in a clean and safe condition and not unreasonably burden any common area.
- Dispose of all garbage and other waste in a clean and safe manner.
- Maintain all plumbing fixtures in a condition as sanitary as the fixtures permit.
- Use all electrical, plumbing, sanitary, heating and other facilities and appliances in a reasonable manner.
- Occupy the residential rental unit in the manner for which it was designed and shall not increase the number of occupants above that specified in the rental agreement without written permission of the owner.
- Comply with all lawful requirements of the rental agreement between the owner and the renter.
- Remove all property and garbage either owned or placed within the residential rental unit by the renter or his guests prior to termination of the rental agreement and clean the rental unit to the condition at the beginning of the rental agreement.
The tenant also has duties and is obligated to not:
- Intentionally or negligently destroy, deface, damage, impair or remove any part of the residential rental unit or knowingly permit any person to do so.
- Interfere with another person’s peaceful enjoyment of the residential property.
- Unreasonably deny access to, refuse entry to or withhold consent to enter the residential rental unit to the owner, agent or manager for the purpose of making repairs to or inspecting the unit and showing the unit for rent or sale.
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 Wyoming
Time Frame: A Wyoming landlord has 30 days from termination or 15 days from receipt of the tenant’s forwarding address, whichever is later, to return any unused portion of the security deposit. An itemized list of damages deducted must be included. If there are damages to the rental unit, this time frame may be extended an additional 30 days.
To comply with return requirements, the landlord must hand-deliver the statement to the tenant directly or mail it to their forwarding address.
Failure to Return Security Deposit as Required: If the landlord refuses or fails to return the security deposit within the 14-30 day limit, the tenant stands to recover up to the full security deposit, plus any legal fees associated with recovering the deposit in court.
Utility Deposits: Any deposit marked as a utility deposit must be refunded to the tenant within 10 days of receiving proof of up-to-date utilities. If the tenant fails to provide this proof within 45 days of termination, the owner should apply the utility deposit to any outstanding utility bills within 15 days of the 45-day period ending.
After applying the utility deposit, any leftover funds shall be returned within seven days or within 15 days of receiving the forwarding address, whichever is later.
Security Deposits and Tax Filing in Wyoming
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 Wyoming
Receipt Requirements: The landlord is not required to provide a receipt for the security deposit in Wyoming.
Security Deposit Holdings in Wyoming: Wyoming laws do not require landlords to hold security deposits separate from other funds.
Security Deposit Interest in Wyoming: Wyoming laws do not require landlords to provide interest on held security deposits.
Nonrefundable Deposit Notice: Any part of a collected security deposit that is nonrefundable must be stated in the rental agreement, otherwise it must be refundable.
New Property Owner’s Responsibility: If a rental property changes ownership, the landlord must:
- Transfer the security deposit to the new landlord and notify the tenant of their contact information; or
- Return the deposit to the tenant and notify the new landlord of its return.
For additional questions about security deposits in Wyoming, please refer to the official state legislation, Wyoming Landlord-Tenant Statutes.