Damages in excess of security deposit

Arlington, Texas
General Landlording & Rental Properties
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Damages in excess of security deposit

Bruce Yi
Member since 2021 · 16 posts · 6 votes

Hi, my tenants just moved out and the property is a complete mess to the point where a full rehab may be needed. The security deposit is approximately 10% of total repairs so it won't cover most of the damages. What's the proper course of action?

Thanks in advance.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y
    Quote from @Bruce Yi:

    Hi, my tenants just moved out and the property is a complete mess to the point where a full rehab may be needed. The security deposit is approximately 10% of total repairs so it won't cover most of the damages. What's the proper course of action?

    Thanks in advance.


    1. Focus on turning it around and getting it rented as quickly as possible to minimize losses.

    2. Send her a bill and give her 30 days to pay in full. Let her know you'll send her to collections if she refuses. You can offer a payment plan, but I wouldn't stretch it out more than six months.

    3. She won't pay, so be prepared to send her to collections. Don't expect her to pay them, either. You may never collect a dime, but at least it will sit on her credit and prevent her from taking advantage of others or qualify for a loan.

    4. Better tenant selection and regular inspections will stop this from happening.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    2y

    As Nathan said, focus on getting it rent ready. Take photos of the condition the tenant left it in.  Make sure you send them an itemized bill within the time required by your local laws.  If they won't pay, then take them to small claims court.  Remember for some items, there is a lifespan (eg carpet).  You can only charge the tenant for the remaining lifespan of those items.

    1Reply
  • Bruce Yi
    OP
    Member since 2021 · 16 posts · 6 votes
    2y

    Thank you @Theresa Harris and @Nathan Gesner. I appreciate the prompt and actionable feedback!

    1Reply
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