Today we’re talking about a topic that every rental property owner thinks they understand… until move-out day arrives: handling tenant security deposits. If you’re self-managing, this is one of the biggest areas where owners accidentally create liability for themselves, so let’s walk through what you must know — especially here in Georgia.
Security Deposits Belong to the Tenant
First things first:
A security deposit does not belong to you. It belongs solely to the tenant unless and until you have a legal reason to claim part of it. I always tell landlords, “Think of it like you’re holding the tenant’s money for safekeeping.” Because that’s literally what the law says. And if you’re self-managing, do not keep this money mixed in your personal or rental operating account. You really should put it into a separate escrow account. Not only does this protect the tenant, but it also protects you from liability issues, audits, and accusations of misusing the funds.
Georgia’s 3-Day Rule
Georgia has a very strict timeline at move-out. Once the tenant moves out and returns the keys, you have 3 business days to:
- Do your move-out inspection
- Complete your security deposit reconciliation
- Deliver a written list of any charges to the tenant
Three days go by faster than people think. So if you’re self-managing, you need a move-out plan in place before the tenant leaves.
What Counts as Damage vs. Wear & Tear?
Here’s where most disputes happen. Georgia law does not clearly define wear and tear. Judges interpret it, and they usually look at one thing: Was the issue intentional or negligent damage… or is it just the result of normal living? A few examples:
● Scuff marks on the walls? Wear and tear. That happens in every home.
● Slight carpet flattening in high-traffic areas? Wear and tear.
● A large burn in the carpet from an iron? Damage.
● Wax poured onto the carpet from a candle? Definitely damage.
● Hole in the drywall? Damage.
● Missing blinds, cracked window, broken appliance handle? Usually damage — unless it was defective or beyond normal life expectancy.
A judge will ask: “Is this something that would reasonably happen if someone was just living their life?” If the answer is yes, it’s wear and tear and you cannot deduct for it.
How Do You Determine the Cost of Repairs?
This is a big one. If you’re not in the business every day, estimating repair costs can be difficult, and you want to be fair, accurate, and defensible. One of the best things you can do is walk the property with a handyman right after move-out: They can give you on-the-spot pricing, You can ask questions in real time, and You get an accurate number to put on the reconciliation. This protects both parties — the owner and the tenant — because you’re basing charges on real costs, not guesses.
Here are some examples
Let’s talk carpets because carpets are the most common disputed item. If the tenant damages the carpet in one room, you typically charge the cost to replace just that room. Carpet is often installed in sections or seams, so you don’t get to replace the whole house. BUT — here’s the twist — the carpet may not match the rest of the home anymore. And that mismatch is not the tenant’s responsibility. You can only charge for the damaged room, and the landlord absorbs the cost of blending or updating the rest of the home.
Another example: TV brackets installed on a wall. This comes up all the time during move-outs. Most tenants install a TV mount at some point — totally normal. But when they remove it, they usually leave behind: Large anchor holes, Wall plugs, Sometimes torn drywall, And almost always… a big outline where the TV used to be. Simply having screw holes isn’t usually considered damage — that’s pretty common. But a full TV bracket installation typically leaves holes much larger than normal wear and tear. And when the bracket gets removed, you’re often left with repairable damage, not just scuffs.
A judge will usually look at it this way: Small nail holes? Wear and tear. Big anchor holes from TV mounts? Damage. Torn drywall or ripped paper surface? Definitely damage. So in most cases, the tenant is responsible for patching, sanding, and repainting that section of the wall — or covering the reasonable cost for a handyman to do it. But keep this in mind: Even if the wall was originally one color, once the repair is done, the paint may not match perfectly. The owner absorbs the cost of repainting the entire wall if needed. The tenant is only responsible for the actual repair area, not a full repaint job.
Final Thoughts
Security deposits are one of the most regulated areas of property management — and one of the easiest places for owners to get themselves into trouble. Keep the money in escrow, follow Georgia’s 3-day rule, document everything, separate wear and tear from true damage, and get real repair costs instead of guessing. And if all of that sounds overwhelming… that’s why property managers exist. At Atlanta Marietta Inc., we handle the inspections, accounting, documentation, repairs, and the entire reconciliation process — so owners stay compliant and avoid disputes. If you want help, have questions, or just want to make sure you're doing this part right, we’re always here.
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