General Landlording & Rental Properties

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Pavan Krishna
  • Investor
  • Lake Oswego, OR
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Last Month Rent from Security Deposit

Pavan Krishna
  • Investor
  • Lake Oswego, OR
Posted May 28 2022, 13:40

Hello my fellow BP-ers,  I'm an out-of-state landlord.  I'm in Oregon with the property is in the bay area California.  Tenants of one of the properties, will be vacating when lease expires (at the end of June).  This week the tenant informed me that they "were hit with some unexpected medical bills and will not be able to pay the June (last month) rent.  Please deduct from Security Deposit."  I did not agree with this as this will leave me with $500 for covering any rent-ready repairs.  $500 will be highly insufficient for that purpose.  The tenants say that they "cannot pay and asked me to go-ahead and hold them in default."  What are my options now?

I can give 3-day notice for not paying rent.  But, they are about to leave in a month.  Is it worth arguing with the tenants?  I'm concerned that they can do more damage on their way out, leaving me with bigger repairs than the typical turnover repairs.  Any advice is welcome.

San Jose, California

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Patrick Drury#2 House Hacking Contributor
  • Real Estate Agent
  • Columbus, OH
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Patrick Drury#2 House Hacking Contributor
  • Real Estate Agent
  • Columbus, OH
Replied May 28 2022, 13:52

@Pavan Krishna
I would take that month's rent out of the security deposit and if the damage to the rental exceeds the $500, send them a bill and let them know if they don't pay you'll send it to collections. Evicting a tenant with 1 month left on the lease would be counterintuitive because you'll spend even more money trying to evict them. The tenant's lease will be up by the time the bailiff tags the door, I'm guessing. Also, from my understanding, evicting tenants in California is no walk in the park either. If you're going to invest out-of-state, invest somewhere that is going to favor you if you need to evict a tenant like Columbus OH.  

  • (614) 412-4565

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Justin V.
  • Rental Property Investor
  • Minneapolis, MN
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Justin V.
  • Rental Property Investor
  • Minneapolis, MN
Replied May 28 2022, 18:39

@Pavan Krishna

I don’t know the rules in California, But I’d start eviction proceedings so they don’t get the idea that they don’t need to move out at the end of the month.

Better now than after 1 month of lost rent.

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Michael Plante
  • Deland, FL
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Michael Plante
  • Deland, FL
Replied May 28 2022, 18:48
Quote from @Justin V.:

@Pavan Krishna

I don’t know the rules in California, But I’d start eviction proceedings so they don’t get the idea that they don’t need to move out at the end of the month.

Better now than after 1 month of lost rent.

BINGO!


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Joe Martella
  • Rental Property Investor
  • Cherry Hill, NJ
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Joe Martella
  • Rental Property Investor
  • Cherry Hill, NJ
Replied May 28 2022, 18:56

Learn the state laws.  What you can do is tell them that you would like for them to take a video of the place.  I would ask them if they would do it so you can market the place.  

Maybe that will make you feel better

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Nathan G.
  • Real Estate Broker
  • Cody, WY
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Nathan G.
  • Real Estate Broker
  • Cody, WY
ModeratorReplied May 29 2022, 06:30
Quote from @Pavan Krishna:

Hello my fellow BP-ers,  I'm an out-of-state landlord.  I'm in Oregon with the property is in the bay area California.  Tenants of one of the properties, will be vacating when lease expires (at the end of June).  This week the tenant informed me that they "were hit with some unexpected medical bills and will not be able to pay the June (last month) rent.  Please deduct from Security Deposit."  I did not agree with this as this will leave me with $500 for covering any rent-ready repairs.  $500 will be highly insufficient for that purpose.  The tenants say that they "cannot pay and asked me to go-ahead and hold them in default."  What are my options now?

I can give 3-day notice for not paying rent.  But, they are about to leave in a month.  Is it worth arguing with the tenants?  I'm concerned that they can do more damage on their way out, leaving me with bigger repairs than the typical turnover repairs.  Any advice is welcome.


You know this is a lie, right? The more likely truth is that they want to use their June rent money to pay for the deposit on their next rental.

Follow your processes. Charge them a late fee. File the 3-day Notice or whatever that crazy state allows. I wouldn't bother filing for eviction, but serving them with notice gets you one step closer in case they hold over. More importantly, it puts them on notice that you're not up for playing games or violating the terms of the agreement. It may be enough to motivate them to pay, but they probably won't. Use the deposit and thank your lucky stars they are gone.

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Replied May 29 2022, 06:39

Tell them that you can't use the deposit for rent. They need to pay the rent.  Let them do half now and half on the 15th.  If they are moving out chances are they want to use the money for their next place.