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Real Property for Indiana Paralegals
Section 10 . 1 . 7

Security Deposit

Jonathan Watson

A security deposit is paid to the landlord for various reasons. One, it shows that the tenant is serious about renting (like the earnest money under a purchase agreement). Two, it can serve as security against failure to pay one or more rental payments. Three, it can serve to defray damages due to physical mistreatment of the property by the tenant. Especially in residential leases, the security deposit may only be used in certain ways, or it must be returned. We will deal with that more below.

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