All or part of the security deposit may be retained by the landlord to compensate for physical damage caused to the premises by the tenant or members of the tenant`s household, pets or guests. A landlord cannot retain a security deposit to cover normal wear and tear. A landlord can also deduct from the security deposit unpaid rent, late charges, unpaid utilities which the tenant is responsible for under the terms of the lease or for actual damages caused by the tenant`s breach of the lease or rental agreement.