What is the standard treatment of security deposits in residential property management?

Security deposits in residential property management are governed by state landlord-tenant law and real estate license law. Standard requirements: (1) Maximum amount — many states cap security deposits at 1-2 months' rent; some have no cap; (2) Trust account — deposits must be held in a designated account, separate from operating funds; (3) Interest — some states require interest-bearing accounts with interest paid to the tenant annually or at lease end; some require non-interest-bearing accounts; some are silent; (4) Return timeline — typically 14-30 days after lease end and tenant vacates, varying by state; some states require shorter (Virginia 45 days, others 21 days); (5) Itemized statement — written list of any deductions, with documentation (receipts, photos); (6) Permitted deductions — unpaid rent, damages beyond normal wear and tear, cleaning required to restore to original condition (above normal wear); (7) Not permitted — normal wear and tear, conditions present at move-in, routine cleaning. Failure to return security deposits or properly account for them is among the most common landlord-tenant disputes and a source of small claims litigation. Some states impose double or triple damages for wrongful retention.