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Property managementSubject 19 of 19

Security deposit

Money held to secure a tenant's performance under a lease and governed by the applicable lease and law.

Direct answer

What does Security deposit mean?

Money held to secure a tenant's performance under a lease and governed by the applicable lease and law.

Exam cue: Client funds require proper custody, records and disposition. Residential deposits also face specific New York statutory requirements.

What does it look like in a question?

New York example

A manager records the deposit separately and follows the required process when the tenancy ends.

Common exam trap

What should you not confuse it with?

A security deposit is not automatically the landlord's income when received.

Related property management terms

Capital improvementA significant addition or replacement that extends useful life, increases value or adapts property to a new use, depending on the accounting and tax context.EvictionA legal process used to recover possession from a tenant under applicable grounds and court procedures.Management agreementA contract authorizing a property manager to perform stated services for an owner.Operating budgetA plan of expected property income and operating expenses for a future period.Preventive maintenancePlanned inspection and service intended to reduce breakdowns, hazards and more costly repairs.Reserve fundMoney set aside for future major repairs, replacements, emergencies or other planned property needs.
Sources used3 references with section locators

The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.

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