Looking for advice from landlords about a security deposit issue
Hi Bigger Pockets. I am a small-time real estate investor, but this question is in regards to my experience with my primary residence. I am looking for some advice on my situation from property managers to make sure I'm not completely crazy. My husband and I recently sold our condo. We asked for the ability to stay in the property, since we weren't sure we were going to be able to find a new home before close.
Our buyer was an out-of-state investor who never saw the property. He agreed to a rent-back. We signed a contract. We paid rent and put up a $3,000 security deposit. We ended up only staying in the house just 16 days after close. We took good care of our home, so imagine our surprise to receive our security deposit back, minus $880.
The buyer deducted the money for repairing damage to the walls (nails), having the condo professionally cleaned, and changing the locks.
Our contract states: "Seller shall maintain the Property, including pool, spa, landscaping and grounds, and all personal property
included in the sale in substantially the same condition as on the date of Acceptance of the Agreement or as modified by the
Agreement."
We believe we did this. The nails in the wall were from pictures and decor we had in the home when we lived there. Those holes were in the wall when we showed the property and at close. At close, the home was in broom swept condition. We spent 11 hours cleaning the property (1,300 square feet) before turning it over. We believe we turned it over in better condition than it was at close. We also turned over all the keys in our possession. The front door was an electronic lock and we provided the code. The other lock they changed was to a door we never locked and never used the key for.
The seller has never seen the property in person. His agent waived her right to a walkthrough at close. She only saw the house when she first viewed it and at the final walkthrough with our agent where she did not mention any concerns or complaints. This same agent is serving as his property manager and she is the one who sent him the costs for all the repairs and cleaning.
We have been trying to get our security deposit back for two months. We have communicated extensively with the real estate agent/property manager and the buyer. We have shown the buyer the wording of the contract. He just doesn't seem to get it. He seems to believe we had to fix all the problems in the house even though we didn't cause them as tenants. They were part of the condition of the house at closing, which he can't even prove, because his agent didn't do a walkthrough.
We are on the verge of going to small claims court. The buyer has told us that he is "95% certain" he will win and that he will countersue us for his time and costs if we bring him to court.
Are we crazy to move forward? We feel like he stole our money. We feel like our contract is crystal clear. We have tried to be reasonable and act in good faith. Did I mention we were only tenants for 16 days and he kept almost $1,000 of our security deposit?
I'd appreciate any insight. Are we interpreting our contract correctly? Is this type of behavior common? Our buyer seems 100% (or 95%) sure he is correct. How could we be seeing this situation so differently? Thanks for any feedback.
Take him to court. You state probably allows you to win 2x - 3x the deposit.
He bought the house in that condition, so he obviously accepted it in that condition. If he felt there were repairs to be done after you moved out, then that should have been discussed in advance. Your only responsibility - legally - is to return the property in the same condition as it was received by the Buyer 16 days prior. The nail holes already existed. The carpet was not professionally steam cleaned. Etc.
CA law only allows for deductions for repair of damage beyond normal wear and tear, unpaid rent, or cleaning only back to the state at the start of the lease. Nail holes are wear and tear. They have 21 days to provide an itemized list and receipts for the repairs. I'd send him this info and let him know you will take him to small claims court for your money. Maybe let him know that when you win he will have to pay you 3x the deposit (1x he owes you and 2x damages)
