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Real estate glossaryNational exam concept

Security deposit

A security deposit is money a landlord holds to secure a tenant's performance, such as payment of rent and responsibility for damage beyond ordinary wear, subject to the lease and applicable landlord-tenant law.

Exam area: Property Management

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What does “security deposit” mean in real estate?

A security deposit is money a landlord holds to secure a tenant's performance, such as payment of rent and responsibility for damage beyond ordinary wear, subject to the lease and applicable landlord-tenant law.

How is “security deposit” different from the closest wrong answer?

A security deposit secures tenant obligations and may be refundable. Advance rent is payment for a future rental period.

What is the Georgia-specific rule?

Georgia law imposes handling, inspection, accounting, escrow, and return requirements that depend in part on the landlord and property. A broker holding deposits must also follow real estate trust-account rules.

Worked exam example

Scenario

A landlord documents the unit's initial condition, holds the deposit as required, and after move-out itemizes a lawful deduction for tenant-caused damage rather than ordinary wear.

What is the most common exam trap?

Trap correction

The landlord does not automatically own the deposit when received, and ordinary wear is not the same as tenant damage.

Original exam check

Apply the definition

A Georgia residential lease signed in 2026 sets rent at $1,500 a month. The landlord wants a $4,000 security deposit, and the tenant is willing to pay it. What is the most the landlord may require?

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