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Security
Deposit Deductions and Refund
Tenant Deposit Facts You Must Know PART 3
Grappling
with tenant deposits is part and parcel of a landlord's life so it
really helps to know all the right steps. In this Part 3
of our Tenant Deposit Guide, let's soak up the must-know facts for
security deposit deductions and security
deposit refund.
Have You Read
Part 1? If No, Click
here for Part 1
of this
Rental Security Deposit Guide.
And
Now for the
Big Question: How do I Tackle Security Deposit Deductions?
As
you can expect, security deposit deduction laws
tend to be a lot tighter so you need to tread carefully here.
Before we drill any deeper, let's unearth the answer to this question
first: What
are valid reasons for making security deposit deductions?
1. Property damages inflicted by the tenant, his/her occupants and
visitors - If you had
been with us long enough, you will know how important it is to conduct
a property inspection and prepare
a landlords inventory before signing the lease.
Your hard work here will pay off when it's security deposit deduction
time. Before the
lease ends, take the tenant for a final property inspection. Since you
have done homework beforehand, Any
damages and losses should be crystal clear. To minimize tenant
complaints, grant your tenant a few days to sort out the repairs before
claiming deductions for any remaining damages.
2. Unpaid rent and other rental bills owed by the
tenant - This one
needs no further explanation.
3.
Cleaning expenses to restore rental property to pre-lease conditions -
If your property requires extensive cleaning (tenant makes little or
effort to clean up)... or there is serious grime that demands
professional cleaning (e.g. major carpet stains or mould-infested bath
tub), you can go ahead and put the cleaning bills on the tenant's
deposit tab.
However, claiming tenant deposit money for
normal wear and tear is a big no-no. This means you can't fault (or
charge) a tenant for any damages or deterioration due to day-to-day use
or natural aging.
To paint you a clearer picture, classic examples of
ordinary wear and tear includes: faded paint, old worn-out
carpets/drapes, "de-silvered" mirrors, loose (but intact) door/window
hinges.
To stake a tenant deposit claim, you will need to have your itemized security deposit
deductions in writing.
In plain English, you will have to record and price each
deduction
individually, with supporting bills and receipts to back it up as far
as possible. As always, you can count on us to make your life easier - Click here for our free
security deposit deduction form.
And
Finally... Things to Watch Out for When Giving a Security
Deposit
Refund
Now that we're all set, let's talk about dishing out your security
deposit refund. Giving a security deposit refund is straightforward
affair but there are two gaping pitfalls to avoid:
One, you can expect strict deadlines for giving security deposit
refunds... and the same goes for claiming security deposit
deductions. These 2 deadlines often fall on the same date but always,
always double-check just to be sure.
Depending
how generous your local laws are, most landlords have anywhere between
14 days to 45 days to deduct and return the tenant deposit. For the
precise answer, Click here for your state
security deposit law on the return of security deposit.
Two, your return of security deposit should come in the form of an
order check payable only to the tenant. An order check leaves you with
a nice dated paper trail (written proof of when you made the refund)
plus if it ever gets lost in the mail, you can just cancel it and
re-issue a brand new one.
Read
what our visitors have to share below OR Scroll down to
add your own comment
What are Your Crucial Tips for
Handling Tenant Deposits?
Security deposits are important for protecting landlords against losses but they must be handled correctly. How do you manage your tenant deposits effectively? What are the dangerous pitfalls that you will always watch out for? Share your valuable experience with everyone here - We will love to hear your tips, comments and real life stories:
What Our Visitors Have to Say on Dealing with Security Deposits
Click on the links below to read the valuable tips that our other visitors have to share:
Handling Interest from Tenant Deposits
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While most landlords know how much tenant deposits to ask and when to deduct money from them, they are often clueless when it comes to dealing with the ...
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