What is the main function of a security deposit?

The main function of a security deposit is to cover unpaid rent or potential damages during the tenancy. A security deposit is typically collected by the landlord at the beginning of a lease to ensure that funds are available to address any financial losses incurred due to the tenant's actions or inactions. This includes payments for any rent that may go unpaid as well as costs associated with repairing damage to the property beyond normal wear and tear.

If the tenant meets the conditions of the lease and leaves the property in good condition, the security deposit is usually refunded at the end of the lease. However, if there are outstanding issues, such as unpaid rent or necessary repairs, the landlord can use the deposit to remedy those situations instead. Thus, the primary intent of the deposit is protective in nature, ensuring that landlords have a recourse to recover damages and unpaid amounts.