South Carolina Security Deposit Laws in 2024

Introduction to South Carolina Security Deposit Laws

Security deposits are a key component of rental housing agreements between landlords and tenants in South Carolina. The state's Residential Landlord and Tenant Act outlines the regulations surrounding security deposits that aim to protect the interests of both parties. 

The purpose of collecting a security deposit is to give the landlord some financial protection if the tenant causes damage, leaves unpaid rent or fees, or breaches the lease. The deposit acts as a form of collateral during the tenancy. However, tenants also have legal rights regarding the handling and return of their security deposit funds.

South Carolina law places certain limits and requirements on landlords regarding security deposits:

• Landlords cannot charge an unlimited or excessive deposit amount.
• Deposits must be held in a separate escrow account.
• Interest earned on the deposit accrues to the landlord.  
• Landlords must provide a receipt within 30 days.
• Deposits must be returned within 30 days after lease termination.  
• Landlords must provide an itemized list of any deposit deductions.
• Tenants can recover up to 3x the deposit for violations.

Understanding the security deposit regulations in South Carolina is important for both tenants and landlords seeking to avoid disputes and ensure a smooth rental experience. Key aspects involve proper handling of deposits, allowable deductions, and the timeframe for returns.

Maximum Allowable Security Deposit in South Carolina

Under South Carolina law, there are no legal limits on the maximum amount a landlord can charge for a security deposit. The security deposit amount is determined by the lease agreement between the landlord and tenant. 

While there are no caps under state law, common practice in South Carolina is for landlords to charge a security deposit equal to 1-2 months rent for an unfurnished apartment or rental home. Furnished units will typically have higher security deposit amounts, as the landlord takes on more risk with having to maintain and replace their own furniture and amenities. Landlords may also increase security deposits for tenants with pets, due to the increased potential for property damage.

The key factor is that the security deposit amount must be agreed upon upfront in the written lease agreement. If the lease does not specify a deposit amount, the maximum the landlord can charge is one month's rent. Landlords cannot arbitrarily raise the deposit or add new fees after the lease is signed, unless the tenant agrees to the changes in writing.

While South Carolina law does not limit security deposit amounts, landlords cannot use the deposit to unfairly price out tenants. The security deposit serves to protect the landlord against damages, not as an additional revenue stream. Most tenants should expect to pay a deposit in the range of their monthly rent payment.

Handling and Storage of Deposits in South Carolina 

South Carolina law has specific requirements for how landlords must handle security deposits during the tenancy. Landlords are required to keep security deposits separate from their own funds, in escrow accounts designated solely for that purpose. 

Landlords cannot commingle security deposits with their personal funds or general operating funds. The deposits must remain in a distinct, separate account until returned to the tenant. This prevents landlords from improperly spending the money.

While tenants pay the security deposit, the interest earned on deposit accounts accrues to the landlord. Tenants are not entitled to the interest their deposits generate, only the return of the original deposit amount, less any lawful deductions. 

Landlords must provide the tenant with the bank name, account number, and amount of the security deposit within 30 days of receiving it. This information should be included on the receipt landlords must furnish tenants. If the landlord ever changes the escrow account, updated receipts must be provided.

Returning the Security Deposit in South Carolina

South Carolina landlords are required to return a tenant's security deposit within 30 days after the termination of the rental agreement or lease. The landlord must send the deposit to the tenant's last known address along with an itemized list of any deductions from the deposit.

If the landlord cannot determine the amount of deductions within 30 days, they must provide an estimated accounting and payment within 30 days, followed by the final accounting within 60 days. Common deductions include unpaid rent, damages beyond normal wear and tear, utility bills left unpaid by the tenant, and costs to re-rent the unit after early termination.

Landlords in South Carolina cannot make deductions from the security deposit for normal wear and tear. This includes minor scuffs on walls, faded paint or carpet, worn appliances, and other standard deterioration from ordinary use over time.

If a landlord fails to return the deposit or provide proper notice within 30 days, the tenant can recover up to three times the security deposit amount in damages. This penalty is designed to deter landlords from wrongfully withholding deposits.

Tenants should provide their forwarding address in writing on or before the lease termination date to ensure the landlord knows where to send the deposit refund. It is advisable for tenants to thoroughly document the condition of the rental upon moving out to contest any improper deductions.

Allowable Security Deposit Deductions in South Carolina

South Carolina landlords are permitted to deduct funds from a tenant's security deposit for the following reasons:

Unpaid Rent

If a tenant fails to pay rent or moves out with rent still owed, the landlord can deduct the amount of unpaid rent from the security deposit. This covers both rent owed for previous months as well as rent still due for the remainder of the lease term after early termination.

Property Damage Beyond Normal Wear and Tear

Landlords can deduct from the deposit to repair any damage to the rental unit or property beyond normal wear and tear. This includes damage such as broken windows, destroyed appliances, holes in walls, and damaged flooring that exceeds normal scuffs or minor wear. 

Costs of Re-Renting After Early Lease Termination

If a tenant breaks the lease early, the landlord can deduct the costs of re-renting the unit from the security deposit, including advertising costs and lost rent during vacancy.

Unpaid Utility Bills

If a tenant fails to pay any utility bills they were responsible for per the lease, the landlord can deduct these amounts from the deposit. This includes unpaid electric, gas, water, sewer, trash collection or any other tenant-paid utility bills.

Security Deposit Receipts in South Carolina

South Carolina law requires landlords to provide tenants with a receipt for their security deposit within 30 days of receiving it. This receipt must include the following details:

• Name and location of the bank where the security deposit is being held
• Account number where the security deposit is being deposited 
• Amount of the security deposit

Landlords must place security deposits in a separate escrow account and cannot commingle deposits with their personal funds or other operating accounts. 

If a landlord changes the bank or account where the security deposit is held, they must provide an updated receipt to the tenant within 30 days of the change. Tenants have a right to know where their security deposit is being kept at all times during the lease.

Failure to provide a proper security deposit receipt can make it difficult for a tenant to track their deposit and ensure it is being handled properly. Not complying with the receipt rules also weakens a landlord's position if a security deposit dispute arises.

Change of Property Ownership in South Carolina

When a rental property is sold in South Carolina, the tenant's security deposit transfers to the new owner. The original landlord who collected the deposit must provide an accounting and documentation to the new owner showing the security deposit amount, along with any accrued interest. 

Upon the sale and transfer of deposits, the new owner takes over all duties and responsibilities relating to the security deposits they have received. This includes providing proper receipts, handling the deposits in accordance with the law, and ultimately returning the deposit to the tenants within 30 days after the end of the lease term, less any lawful deductions.

The tenant does not need to pay a new security deposit or transfer their funds themselves when their rental unit changes ownership. The selling landlord must coordinate the accounting and transition of security deposit funds to the new owner when the property sale closes. This ensures continuity of the lease and smooth transition of landlord duties.

South Carolina Tenant Rights

South Carolina tenants have several important rights under state law that govern the landlord-tenant relationship. These include:

Right to Habitable Living Conditions

Tenants in South Carolina have a right to safe, clean and habitable living conditions. This means the rental property must comply with all applicable housing codes, be structurally sound, have proper weatherproofing, and contain working utilities, appliances, smoke detectors, and other essential features. If a landlord fails to maintain habitable conditions after being notified, tenants can terminate the lease, deduct repair costs from rent, or pursue legal remedies.

Right to Privacy from Unreasonable Entry 

Landlords in South Carolina must provide reasonable notice before entering rental units, generally defined as 24 hours. They can only enter for necessary reasons like repairs, inspections, showings or emergencies. Tenants can take legal action if a landlord violates their right to privacy by entering without proper notice or reason.

Right to Deduct Rent for Serious Failures

If a South Carolina landlord fails to maintain the rental in habitable condition, tenants can deduct a "reasonable portion" of the rent after notifying the landlord. For example, tenants may deduct rent if the air conditioning fails during summer months or hot water stops working. The deducted amount gets put in escrow until repairs are made.

Right to Retrieve Possessions After Eviction

South Carolina law requires landlords to hold the personal property and possessions of evicted tenants for 30 days. Tenants can contact the landlord during this period to retrieve their belongings or make arrangements to pick them up. Landlords cannot unlawfully dispose of or withhold a tenant's property just because they were evicted.

Security Deposits for Roommates and Subletters in South Carolina

South Carolina law has specific rules regarding security deposits when there are roommates or subletters involved.

Separate Leases

If roommates each sign separate lease agreements with the landlord, they are only responsible for their own security deposit and any damages to their rented space. The landlord cannot make deductions to one roommate's deposit for damages caused by another roommate.

Joint and Several Liability  

If roommates sign a joint lease agreement, they have "joint and several liability." This means they are all equally responsible for covering the total security deposit amount stated in the lease. The landlord can deduct damages from the deposit caused by any one of the roommates.

Subletters

If the original tenant sublets to another tenant without the landlord's consent, the original tenant remains solely responsible for the entire security deposit according to the original lease. Unauthorized subletters would not have a right to any portion of the security deposit refund when the lease ends.

If the landlord approves the sublease, the original tenant can legally transfer deposit responsibility to the subletter. The original tenant would get their deposit portion refunded when the sublease ends. The subletter would be responsible for the remaining deposit under the original lease. Proper documentation is essential in this scenario.

Disputes and Remedies for Security Deposits in South Carolina

If a tenant believes the landlord wrongfully withheld all or part of their security deposit in South Carolina, they have several options to resolve the dispute:

Small Claims Court

Tenants can sue the landlord in small claims court if the amount in dispute is less than $7,500. This is often the quickest and easiest way to recover deposit funds, without needing to hire a lawyer. The tenant will need to provide evidence the deductions were improper or unlawful.

Penalties for Violations

If a South Carolina landlord fails to comply with deposit laws, they may have to pay the tenant up to 3 times the security deposit amount in damages. This penalty applies if the landlord fails to return the deposit in 30 days without good cause, does not provide proper receipts, or makes unlawful deductions. 

Attorney General Complaint

Tenants can file a complaint with South Carolina's Attorney General regarding security deposit disputes with landlords and alleged violations of the law. The AG may investigate complaints and take action against violations.

Statute of Limitations

Tenants generally have one year from the end of the lease to file a lawsuit against the landlord over a security deposit dispute in South Carolina. After one year, they may lose the right to recover deposits and damages unless they file suit.

Tenants should carefully review their lease, documentation, receipts, and details of any damages or unpaid rent to build their case. Having photographic evidence of the property's move-in and move-out condition is also helpful. If possible, try to resolve deposit disputes through communication with the landlord before taking legal action.

Frequently Asked Questions

What is considered normal wear and tear in South Carolina?

In South Carolina, normal wear and tear refers to the natural and gradual deterioration of the rental property that occurs under normal conditions. This includes minor marks on walls, carpet wear from regular use, fading paint due to sunlight, and other similar minor damages. It does not cover extensive damage like large holes in walls, broken windows, or significant staining on carpets.

How long does a landlord have to return a security deposit in South Carolina?

Landlords in South Carolina have 30 days to return a security deposit after the tenant has moved out and returned the keys. The landlord must provide a written statement itemizing any deductions made for damages beyond normal wear and tear, unpaid rent, or other breaches of the lease.

What are renters' rights in South Carolina?

Renters in South Carolina have rights that include living in a property that meets basic structural, health, and safety standards and is in good repair. Tenants have the right to privacy, with the landlord required to provide notice before entering the property (except in emergencies). They also have the right to a fair eviction process, which includes receiving proper notice and the opportunity to contest the eviction in court.

Can you withhold rent in South Carolina?

In South Carolina, tenants are allowed to withhold rent if the landlord fails to make necessary repairs that affect the health and safety of the tenant. However, the proper legal steps must be followed, including providing the landlord with written notice of the issues and giving them a reasonable amount of time to address the problems. If the issues are not resolved, tenants may place their rent payments in an escrow account until the dispute is settled.

What is 27-40-410 in South Carolina?

Section 27-40-410 of the South Carolina Residential Landlord and Tenant Act outlines the landlord's obligations to maintain the property. It stipulates that landlords must comply with building and housing codes materially affecting health and safety, make all repairs needed to keep the premises in a fit and habitable condition, keep common areas safe and clean, maintain in good and safe working order all electrical, plumbing, sanitary, heating, ventilating, air-conditioning, and other facilities and appliances supplied or required to be supplied by the landlord, and supply running water and reasonable amounts of hot water at all times and reasonable heat.