Superior Real Estate School Practice Exam

To determine the maximum security deposit that Frank may charge for a one-year rental agreement at a monthly rent of $1,500, it is critical to understand the regulations regarding security deposits. In many regions, the security deposit is typically capped at a certain amount based on the monthly rent, often equating to two months' rent for a lease longer than a year.

In this case, since Frank is renting out the property for one year, the overall maximum security deposit he may charge can amount to two times the monthly rental amount. Given that the monthly rent is $1,500, this leads to a calculation of $1,500 multiplied by 2, resulting in a maximum allowable security deposit of $3,000.

This understanding illustrates that the basis for the security deposit is directly tied to the length of the lease as well as the amount of monthly rent, reflecting the landlord's right to ensure protection against potential damages or unpaid rent. Additionally, being a licensee is not a determining factor for the limitations on security deposits, making it integral to refer to local laws governing such amounts. Thus, the maximum security deposit Frank can legally require is $3,000.