Missouri Security Deposit Laws: 9 Important Questions

A security deposit is an amount of money that a tenant pays their landlord before lease signing. It is refundable at the end of the lease term so long as the tenant has abided by all terms of the lease.

While Missouri tenancy laws don’t require tenants to pay a security deposit, landlords do have a right to collect it.

As a landlord, you must follow Missouri rental laws when it comes to handling a tenant’s security deposit. If you don’t, you risk rubbing shoulders with the law.

The following is a basic overview of the Missouri Security Deposit Law.
As a landlord in Missouri you can ask for a security deposit on a rental property

1. Is there a limit to how much a landlord can charge as security deposit?

Yes, there is. As a landlord in the state of Missouri, you must collect no more than 2X the monthly rent as deposit. So, let’s suppose you charge your tenants $1,500 in monthly rent. (MO Rev Stat § 535.300 (2)).

In such a case, the maximum you can charge them as security deposit shouldn’t exceed $3,000.

2. Can you charge your tenant a non-refundable deposit?

According to Missouri state statutes, landlord tenant laws dictate that nonrefundable deposits are illegal. All deposits received from a tenant are refundable at the end of their lease term.

That said, landlords do have a right to make deductions from the tenant’s deposit in certain situations. For instance, in case the tenant fails to pay rent or causes excessive property damage. In such cases, you may be able to make appropriate deductions from their deposit to cover your losses.

3. What reasons may warrant a landlord to make deductions to a tenant’s security deposit?

As already mentioned, a landlord has a right to make deductions to a tenant’s deposit in certain cases as per Missouri rental laws. (MO Rev Stat § 535.300 (4)). The following are some of the common situations that can lead to this.

  • To cover unpaid utilities. Naturally, after a tenant signs a lease, they will become responsible for paying certain utilities. And when the tenant leaves the unit, they will be required to have cleared those utilities. If they don’t, the landlord can make appropriate deductions on their security deposit to clear those bills.

  • To cover excessive cleaning costs. A tenant is usually required to return the property they have rented in the same condition they found it. Of course, less normal wear and tear. If the tenant, upon moving out, returns it in an appalling condition, the landlord can hold the tenant financially liable.

  • To cover loss in rent payments. Failure by a tenant to pay rent is a serious violation of the lease agreement. So, should it happen, a landlord can cover their losses by making deductions on the tenant’s deposit.

  • To cover excessive property damage. This is usually among the top reasons for deductions to a tenant’s security deposit. Examples of excessive property damage includes holes in the walls, and unauthorized paint colors.
    Missouri state statutes landlord tenant laws

    4. How should a landlord store a tenant’s security deposit in the state of Missouri?

In Missouri, no statute exists regarding how landlords should store a tenant’s security deposit. As a landlord, you are free to store it anyhow you want, as the law doesn’t require it to be stored in any financial institution.

The account may be interest bearing or not. But if you choose to store it in an interest-bearing one, then any interest accrued will be yours. (MO Rev Stat § 535.300 (2)).

5. Can a Missouri tenant use the security deposit as last month’s rent?

No. A tenant must not use their security deposit as last month’s rent.

6. Do you have to provide the tenant with a receipt after receiving their deposit?

In a state like Florida, for example, landlords are required to provide their tenants with a receipt after receiving their deposit. And they must do so within 30 days. The notice must include important details such as:

  • Where the deposit is being stored.
  • If the funds are kept separately or have been commingled with others.
  • The interest rate the funds are expected to accrue.

But is any of these required in Missouri? No! Under the law, you have no obligation to notify your tenant of the receipt of their funds. It’s up to you to decide whether you’ll do it or not.

7. Does your Missouri tenant have a right to a walk-through inspection?

As a Missouri landlord, you must perform a walk-through inspection once your tenant moves out. The inspection helps in determining whether the tenant has returned the property in good state or not.

Now, depending on the state, tenants may or may not have a right to be present during a walk-through inspection. In Missouri, though, tenants have a right to be present.

You must notify them about the date and time of the inspection. The notice must be in writing, and the inspection must be held at a “reasonable time.”

In case the tenant has caused excessive property damage, you may deduct the appropriate amount from their deposit.

8. When must you return the tenant’s security deposit after they move out?

Once the tenant vacates their rented premises, you’ll have 30 days to return their deposit. Of course, the refund may be partial or full.

If there are deductions, you must send the remaining portion of the deposit alongside a written itemized list of the deductions made. You must do so within the 30 days.

If there are no deductions, then you must also refund the tenant their entire deposit within the 30 day window.
Be sure to consult Missouri tenant laws to find out how much you can charge for a security deposit

9. What should happen if the property is sold during an active lease agreement?

In such a case, you will have two options to consider. One, you may consider returning the security deposit back to the tenant. Or, transfer all the tenant’s security deposit to the incoming landlord. The incoming landlord will then be responsible for notifying the tenant that their rented property has exchanged hands.

Disclaimer: This blog is only meant to be educational. For further help, please seek help from either a qualified attorney or an experienced property management company.

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