What is the purpose of a security deposit?

The primary purpose of a security deposit is to protect against damages that may occur to the property during a tenant's occupancy. Landlords require a security deposit to secure their financial interests, ensuring that funds are available to cover any potential repair costs or financial losses should the tenant damage the property beyond normal wear and tear. This safeguard allows landlords to maintain the property in good condition and encourage tenants to take care of the premises, knowing that their deposit could be withheld if necessary repairs arise due to their actions.

While a reserve for utilities or ensuring a long-term lease may be considerations for both landlords and tenants, they do not capture the fundamental purpose of the security deposit, which is specifically focused on providing a financial cushion against property damage.