Legal Definition of Security Deposit: Money paid to a landlord at the beginning of a lease to ensure the tenantÆs compliance with the terms of the lease. The money is held in trust by the landlord and may be used to cover costs resulting from any breach of the lease terms by the tenant, including damage to the property. If there are no such breaches, the money is refundable to the tenant at the end of the lease term | Find out the legal definition of a security deposit and its importance in protecting both landlords and tenants. Learn how providing a security deposit as a business owner showcases your commitment to being a responsible tenant and increases the chance of getting a refund at the end of your lease term