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Key Takeaways
- Flexibility with deposits: South Carolina sets no maximum limit, but deposits must be fair and transparent.
- Follow legal requirements: Landlords must document, return deposits within 30 days, and justify deductions properly.
- Avoid costly disputes: Mishandling deposits can lead to penalties, so staying compliant or using a property manager is essential.
Did you know that mishandling a tenant’s security deposit is one of the most common reasons landlords face legal disputes in South Carolina?
Security deposits are not only a financial safeguard, but they also establish clear expectations between you and your tenants.
When managed correctly, they help protect your investment and maintain professionalism in your rental business.
For a landlord, collecting a security deposit from your tenant offers many benefits. They include:
- Providing financial protection against property damage
- Covering unpaid rent or late fees
- Offering a sense of security when leasing to new tenants
- Encouraging tenants to maintain the rental unit properly
- Reducing financial risk when a tenant breaks the lease
This blog by Tide Property Management explains South Carolina’s security deposit laws.
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Understanding South Carolina Security Deposit Law
It is crucial that South Carolina landlords understand the state’s security deposit laws to avoid costly mistakes.
Security Deposit Limit in South Carolina
Unlike many states, South Carolina landlord-tenant law does not set a maximum limit on how much a landlord can charge for a security deposit.
This means you have the flexibility to set an amount that you feel adequately protects your property.
However, it is a best practice to keep your deposit reasonable and consistent with the local rental market.
Overcharging may make your property less attractive to tenants and could raise concerns if challenged in court.
Nonrefundable Fees in South Carolina
South Carolina law does not prohibit nonrefundable fees. However, you must clearly state in the lease agreement which amounts are considered nonrefundable and why.
Common examples include cleaning fees or pet fees. To avoid disputes, always put these terms in writing and make sure tenants understand them before signing the lease.
Storing a Tenant’s Deposit in South Carolina
South Carolina law requires landlords to handle deposits in a fair and transparent way.
While the law does not mandate landlords to place deposits in a separate or interest-bearing account, it does require you to account for the deposit properly.
If you own more than four rental units, you must follow specific rules about how deposits are handled.
This includes disclosing how you are holding the deposit and providing written notice to the tenant.
Written Notice after Security Deposit Receipt
Landlords in South Carolina are not required by law to provide a written notice of receipt for a tenant’s deposit.
However, it is highly recommended that you issue a receipt or include the details of the deposit in the lease agreement.
This creates a record for both parties and reduces the risk of confusion later.
Reasons to Withhold a Tenant’s Security Deposit in South Carolina
Under South Carolina law, landlords may keep all or part of a tenant’s deposit for specific reasons. Common reasons include:
- Unpaid rent
- Damage exceeding normal wear and tear
- Unpaid utility bills that were the tenant’s responsibility
- Costs related to the tenant breaking the lease early
However, you cannot withhold funds for conditions that existed before the tenant moved in or for normal wear and tear, such as faded paint or minor carpet wear.
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A Walk-Through Inspection
South Carolina law requires landlords who own more than four rental units to follow specific inspection rules. You must give tenants the opportunity to attend a move-out inspection.
While the law does not set a specific timeframe, it is recommended to give tenants at least 48 hours’ notice in writing.
This inspection helps document the property’s condition and ensures fairness when determining deductions from the deposit.
Security Deposit Refund in South Carolina
In South Carolina, landlords must return the tenant’s security deposit within 30 days after the lease ends and the tenant moves out.
If you withhold any portion of the deposit, you are required to provide an itemized statement of deductions along with the remaining balance.
Failing to return the deposit or provide proper documentation within 30 days can result in the tenant filing a legal claim against you.
Change in Property Ownership
If you sell your rental property or transfer ownership, you must handle tenant deposits carefully.
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As the outgoing landlord, you have two options:
The first is to return the tenant’s security deposit, minus any lawful deductions, directly to the tenant.
The second is to transfer the deposit to the new owner and notify the tenant in writing within a reasonable time after the transfer.
Once notified, the new owner becomes legally responsible for the deposit under South Carolina law.
This ensures that the tenant’s deposit is properly accounted for during the ownership change and that liability is clearly established between seller and purchaser.
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Conclusion
Security deposits are an important part of managing rental properties in South Carolina.
As a landlord, you must understand how much you can charge, how to store the deposit, and when and how to return it.
You must also know the proper reasons for withholding funds and follow inspection and refund requirements. Failure to comply with state law could lead to disputes, financial penalties, or legal action.
If you have specific questions about South Carolina security deposit law, you should consult a qualified South Carolina attorney.
You can also work with a knowledgeable property management company that can guide you through the legal requirements and handle deposits on your behalf.
At Tide Property Management, we help landlords comply with South Carolina rental laws while protecting their investments.
Our team handles everything from lease drafting to deposit refunds so you can focus on growing your rental business.
Disclaimer: This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws frequently change, and this post might not be updated at the time of your reading. Please contact us for any questions you have regarding this content or any other aspect of your property management needs.
