A security deposit confirmation letter, or proof of receipt, is a formal document recording the receipt of a tenant’s security deposit. Landlords and tenants should sign a security deposit confirmation letter (proof of receipt) when the tenant pays the deposit required. This document serves as an addendum to the lease and provides verification the tenant paid the deposit. It protects the landlord, the tenant, and any future buyer of the property by documenting the amount of deposit paid.
This article discusses the importance of this document and provides a format you can use to create your own security deposit confirmation letter. We have also provided a sample letter to demonstrate the format’s use.
The Importance of the Security Deposit Confirmation Letter
The security deposit confirmation letter protects you and the tenant from any potential conflict about the security deposit. It also fulfills the requirement of some states to inform tenants of the escrow account information. This document protects future property buyers who need this information to make informed purchasing decisions.
- Confirm Security Deposits Within 30 Days. As a landlord, you should provide the tenant with a copy of the security deposit confirmation letter within thirty days of signing. Keep the original document with the lease in the tenant file.
- Keep the Deposit Funds in an Escrow Account. Depending on your state’s tenant and landlord laws, you could be required to deposit these funds in an interest-bearing account. You may also need to pay the earned interest to the tenant on an annual basis. If not paid annually, you will need to pay this to the tenant when you refund their security deposit.
- Pay Annual Interest. If you pay interest annually, use this document each year to provide proof you paid the tenant the interest earned. Always keep the original with the lease and send a copy to the tenant within 30 days.
- Inform the Tenant. Some states require you to inform the tenant about the security deposit escrow account. In these states, you must give the tenant the name of the bank, the account number, and the escrow account’s interest rate. You will need to provide annual statements of the interest earned on the deposit, whether you pay the interest annually or not.
What to Include in Your Proof of Receipt Letter
Include the following information at a minimum:
- Tenant Name
- Landlord Name
- Property Address
- Security Deposit Amount
- Date paid
Information you will need to provide if your state requires you to inform the tenant of the escrow account particulars:
- Account Name, Number, and Type
- Bank Name and Address
- Annual Interest Rate
- Interest Due to the tenant
- Interest paid to the tenant
Format for a Security Deposit Confirmation Letter (Proof of Receipt)
This document verifies that the tenant {tenant name} paid the landlord {landlord name} a security deposit of {amount} on {date}. The tenant agrees to the terms of the receipt, escrow, and return of the security deposit as outlined in the lease agreement.
Address: {tenant address}
This document serves as the tenant’s Security Deposit Annual Report. The tenant’s security deposit is being held according to the following information:
Account: {account name}
Account Number: {account number}
Account Type: {account type}
Bank: {bank name}
Bank Address: {bank address}
Annual Interest Rate: {interest rate}
Security Deposit Amount Paid: {amount}
Annual Interest Due to Tenant: {amount}
The tenant {(has been paid) or (has not been paid)} the annual interest due on the date of this notice.
{tenant signature and date}
{tenant name}
{landlord signature and date}
{landlord name}
Sample Security Deposit Confirmation Letter (Proof of Receipt)
This document verifies that the tenant, Marissa Knowles, paid the landlord, Mason Hargrove, a security deposit of $2,000.00 on May 2, 2030. The tenant agrees to the terms of the receipt, escrow, and return of the security deposit as outlined in the lease agreement.
Address: 2816 South Elm Place, Apt. 108, Broken Bow, NM 23558
This document serves as the tenant’s Security Deposit Annual Report. The tenant’s security deposit is being held according to the following information:
Account: Elysium Properties Escrow
Account Number: 38957672434
Account Type: Escrow
Bank: American National Bank
Bank Address: 3008 West Lansing, Harding, NM 23589
Annual Interest Rate: 0.50%
Security Deposit Amount Paid: $2,000.00
Annual Interest Due to Tenant: $10.00
The tenant has been paid the annual interest due on the date of this notice.
Marissa Knowles May 2, 2031
Marissa Knowles
Mason Hargrove May 2, 2031
Mason Hargrove
Security Deposit Proof of Receipt (Word Template )
Write this letter to document the tenant’s security deposit payment. This letter also informs the tenant about the escrow account and documents any interest paid yearly. Feel free to use the provided letter format to create your own security deposit receipt letters.
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