Tenant using security deposit for last month's rent

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Tenant using security deposit for last month's rent

Cheryl C.
Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes

I'm really annoyed at a petty tenant whose lease is ending. I was wondering what, if anything, you fellow LL's would do. A middle aged doctor rented a property from me as a weekend retreat. His lease is up the end of this month. He stiffed me on April's rent and told me to use his deposit. Well, I was down there today. The grass is a foot high, the place isn't "move-out" clean, there are a couple of broken windows, etc. I'm tempted to file an unlawful detainer. I already sent a 5 day notice to pay or quit. This kind of thing hasn't been pulled on me for 15yrs. And this guy is a Dr. Would you just forget it and him and move-on or sue the jerk?

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Kevin Perk
Rental Property Investor · Memphis, TN · Member since 2011 · 111 posts · 40 votes
14y

See you in court Doc!

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y

    There is a recent related thread:

    http://www.biggerpockets.com/forums/52/topics/72756-breaking-the-mindset-of-the-security-deposit-covering-the-last-months-rent

    This tenant that you have is the sort where you should pursue all legal remedies available to you. Follow things exactly as they are supposed to be done (notice to quit, service of legal process, itemization of damages for move out, and timely explanation of disposition of security deposit where you explain you had to use it to fix things).

    Get a judgment for the damages and try to collect. Sometimes it pays to do so.

    Lastly, this will put out the alert to all other landlords that this character is doing this sort of stuff, so that no other landlord who does proper screening will be put into the same situation.

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  • Cheryl C.
    OP
    Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
    14y

    Steve. I posted on that thread. I guess I'll file the unlawful detainer/warrant in debt - as I said I would in that post! There is no confusion about him not knowing that he can't use the deposit. He read the lease thoroughly before he signed it. He even had questions about several provisions. I have all the e-mails and a copy of his "deposit". I'm just venting. This guy is a professional and to act in this manner is NOT professional.

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  • Kevin Perk
    Rental Property Investor · Memphis, TN · Member since 2011 · 111 posts · 40 votes
    14y

    See you in court Doc!

    1Reply
  • Cheryl C.
    OP
    Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
    14y

    LOL!

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    14y

    Soemtimes you have to cut your losses and move on. Few broken windows and mowing the yard does not seem like enough to go to court.

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
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  • Cheryl C.
    OP
    Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
    14y

    Curt,
    That's where I was leaning. Why put anymore thought or time into this guy. I've got bigger fish to fry.

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  • Irina Gav
    Denver, CO · Member since 2010 · 19 posts · 0 votes
    14y

    Curt, i hear what you are saying, and it has been a tendency (or at least that the feeling I get from most posts) to move on and forget. Of course it is easier to do and eat up all the costs but shouldn't it become more tough for those jerks eventually to get a place? Who will teach them a lesson? Especially someone who is worth going after.

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  • Brian K
    Naugatuck, CT · Member since 2011 · 21 posts · 1 vote
    14y

    I was wondering if you put a clause in the lease that says, tenant agrees not to use security as rent of any type if that would be leagal to put that in there?

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  • Ibrahim Hughes
    Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    14y
    Originally posted by Cheryl C.:
    This guy is a professional and to act in this manner is NOT professional.

    Some of your biggest crooks wear suits everyday. And some of the biggest PITA tenants are your so-called 'professionals'.

    I would wait until he's officially out of the unit before I sued for any damages. Don't want him using the legal battle to erroneously claim that he still has rights to the place. Just my opinion.

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  • Ann Bellamy
    Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    14y

    I'd go after him for the difference. You should easily get a judgement and that judgement will show on his credit report. The reason he's trying to stiff you is because he can. It sets a bad precedent and puts everyone on notice that you allow it. If on the other hand, you go after him, it puts everyone on notice that you are not a pushover.

    Half of not having these kinds of issues is putting people on notice that you won't tolerate it. A lease detailing exactly what is acceptable and what isn't also shows him that you mean business.

    Yes, it's petty, and yes, it's a PITA, but if you are in the business of rentals, you want to make sure they know you will come after them and not let them get away with it.

    Just like putting "Security Deposit and references required" in my ads for apartments cuts down on the calls from people with bad references.

    Now, having said all of that, there are times that I make a business decision that the investment of time is not worth it. Depends on the client and the impact it will have on other tenants.

    1Reply
  • Kyle Meyers
    Residential Landlord · Indianapolis, IN · Member since 2010 · 592 posts · 138 votes
    14y
    Originally posted by Brian K:
    I was wondering if you put a clause in the lease that says, tenant agrees not to use security as rent of any type if that would be leagal to put that in there?

    I have a similar clause in my lease. I think most leases state the deposit cannot be used for current rent. I don't think you want to write "rent of any type" because if they move out you could not withhold the deposit for unpaid rent. In Indiana, state law dictates the tenant cannot apply their security deposit to current rent.

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  • Chris Masons
    Investor · Union, NJ · Member since 2011 · 838 posts · 295 votes
    14y

    These are the scnarios where I wish here in NJ we can require at least 2 months of security deposit vs. 1.5. I alwyas ask for 1.5 so at least I have a half month of security should the tenant try and use security fro last month in which I say if you do this the bal. of the security will be lost due to breach of contract.

    I guess you only have 1 month security? It varies from state to state the max security you can ask for upfront.

    It may be borderline whether it's gonna be worth the headaches to pursue in court but give all indications that you plan on pursuing legally and maybe he will end up paying you.

    good luck Cheryl and remember it could have been ALOT worse.

    Chris

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