What is a security deposit intended to cover?

A security deposit is intended to cover repair expenses or unpaid rent when a tenant vacates. This means that if a tenant causes damage to the rental property beyond normal wear and tear, the landlord can use the security deposit to cover the costs of repairs. Similarly, if a tenant fails to pay rent before leaving, the landlord may retain the security deposit to recoup some of those unpaid amounts. The mechanics of this process are often outlined in state law, including regulations governing how deposits must be handled, what they can be used for, and the procedures that must be followed when returning the deposit to the tenant.

The other options presented do not accurately reflect the primary purpose of a security deposit. For instance, legal fees and utility payments may be part of a broader rental agreement but are not commonly addressed through the security deposit. Insurance premiums are also separate financial responsibilities and would not typically be covered by the security deposit, as they are meant to protect the property owner rather than recover tenant-related costs. Thus, the correct answer highlights the specific function of security deposits in relation to tenant obligations at the end of a lease.