Landlord guide · Security deposits
What the lease says about the security deposit, and which dates come from it.
A security deposit clause answers six questions: how much, in what form, where it is held, when it may be applied, when it must be returned, and what happens if it is drawn on. Read the clause for those six and mark which of them is a date. Most are not. The return period runs from an event, such as the tenant handing back the keys, so its date does not exist until the event does. The dates that can exist in advance are a letter of credit’s expiry and renewal and any scheduled step-down. Prism quotes the clause in the abstract and dates the letter of credit renewal; it does not track the return deadline or a step-down as deadlines, so the example shows how to date them yourself.
Worked example: three deposit clauses
Two leases: a residential lease whose term ends on Aug 31, 2027, and an office lease that holds its deposit as a letter of credit. Three clauses, and for each the date that follows from it and whether Prism dates it.
Residential lease: return“Landlord shall return the Security Deposit, less any lawful deductions, within thirty (30) days after Tenant returns possession of the Premises.”
Office lease: letter of credit“The Letter of Credit shall have an initial expiry date of June 30, 2027 and shall renew for successive one-year periods. Tenant shall deliver a renewal or replacement not later than thirty (30) days before each expiry date.”
Office lease: step-down“The Commencement Date is July 1, 2026. On the third (3rd) anniversary of the Commencement Date, and provided no Event of Default has occurred, the amount of the Letter of Credit shall be reduced by one-third.”
| Clause | Date | How it is worked out | In Prism |
|---|---|---|---|
| Letter of credit renewal | May 31, 2027 | 30 days before the Jun 30, 2027 expiry. The next year it is May 31, 2028 | A dated deadline when the lease states the expiry, with reminders |
| Return of the deposit | Sep 30, 2027 | 30 days after possession is returned. If the keys come back on Aug 31, 2027, the last day is Sep 30, 2027 | Not a deadline: it runs from an event. The clause is quoted in the abstract, and you date it when the event happens |
| Step-down of the letter of credit | Jul 1, 2029 | Third anniversary of the Jul 1, 2026 commencement | Quoted in the abstract. It is not one of the deadline kinds Prism tracks, so put it in your own calendar |
The return clause counts from the day possession is returned, not from the end of the term, so the date moves with the event. Whether a deduction from the deposit is allowed is a different question from when it is due back.
The lease and its clauses were written for this page, not taken from a customer’s lease. The dates are worked out by hand and checked against the same date arithmetic Prism uses.
What to read in a deposit clause
Amount and form
How much, and whether it is cash, a letter of credit or something else. Quoted in the abstract’s security deposit term.
Where it is held
For a residential lease, where the deposit is kept, in the lease’s own words.
When it may be applied
The conditions the clause states for deductions from the deposit or for drawing on it.
The return period
How long the landlord has to return it, and the event the count runs from: the end of the term, the return of the keys, a final inspection. The date does not exist until that event does.
Reductions
A scheduled step-down and the conditions for it, such as no default at the time. Quoted; put the date in your own calendar.
Letter of credit expiry and renewal
The expiry date, the renewal rule and the last day for a renewal or replacement, dated when the lease states the expiry.
What it is not
Prepaid rent, a pet deposit and a guaranty are separate terms. A guaranty is not a deposit.
What it will not do
Prism returns what the lease states and quotes where. It does not track a deposit's return deadline or a step-down as a deadline, does not tell you whether a deduction is allowed, and does not read the rules some places apply to deposits whatever the lease says. It is not legal advice, and reminders are best-effort.
Use it from an AI agent
Prism is a remote MCP server. In Claude Code:
claude mcp add --transport http prism https://prism.parad1gm.com/api/prism-mcpThen ask: “Read this lease and quote what it says about the security deposit or letter of credit, and list any dated deadline connected to it, with the clause each one comes from.” The agent sends the document with prism_review_contract and reads the result with prism_get_contract. Setup for Claude on the web, Cursor, VS Code and A2A agents is on the agents page.
$0.50 a contract for an agent, and the first 3 are free. On the website it is $1 per contract, or $9 a month for up to 50.
Questions
Does Prism track when I have to return the deposit?
No. The return period runs from an event, such as the tenant handing back the keys, so there is no date until the event happens, and it is not one of the deadline kinds Prism tracks. The clause is quoted in the abstract; count the period from the day the event happens, as in the example. If the keys come back on Sep 15, 2027 instead, 30 days later is Oct 15, 2027.
What does the abstract show for the deposit?
For a paid lease, a security deposit term: the amount, the form (or, for a residential lease, where the deposit is held) and, where the lease states them, the conditions for deductions, reduction or return, with the sentence quoted. When the lease requires no deposit, the term is left empty.
Does the lease or the law set the return period?
Both can matter. Some places have rules about deposits that apply whatever the lease says, and they can be stricter than the lease. This guide covers only what the lease says, and Prism reads only the lease. Check the rules where the property is.
Will it remind me about a letter of credit?
For a paid lease, when the lease states the letter of credit’s expiry or its renewal rule, the renewal date is a dated deadline and Prism emails 90, 30 and 7 days before it. If the lease leaves the expiry to the letter of credit itself, there is nothing to count from: the rule is returned and the date is left empty.
What if the lease calls it something else?
The term covers the deposit or letter of credit the lease requires, whatever it is called. Prepaid rent, a pet deposit and a guaranty are separate terms.
What if an amendment changes the deposit?
Add the amendment from the lease, or send it with amendsContractId from an agent. It is read together with the lease, so the deposit term and any dates show the lease as amended.
Is this legal advice?
No. It tells you what the lease says and where. Whether you may keep any of a deposit is a question for the lease, the rules where the property is, and a lawyer.
More for landlords
Every guide here starts from the lease. Prism for landlords shows the whole picture: leases, insurance certificates and loan documents read once and put on one calendar that emails you before each date.
- How to track lease expirations across your rental units
- How to track your tenants’ insurance certificates
- When the rent goes up: escalation and CPI adjustment dates
- The tenant’s option to renew: the dates a landlord should watch
- A spreadsheet or Prism for lease expiries
This guide is about what a lease says and which dates follow from it. It is not legal advice, and it does not cover state or local law. How often Prism finds these dates is on the accuracy page.