Damage exceeds damage deposit. What is my recourse?

Question

My recently departed tenant's deposit was not enough to cover all the repairs (repairs NOT due to normal wear and tear).  what is my recourse? I am in Colorado. THANKS IN ADVANCE for any suggestions!

Theresa Harris · Answer

Honestly, not what you want to hear, but take photos of the damage, send them an itemized invoice and tell them what they owe you. Chances are you won't get anything even if you go to small claims court and win.  Get the place fixed up and place a good tenant and move on.

Nathan Gesner · Answer

Theresa is right. Document heavily with photos. I hope you did this before they occupied. Then take pictures of exactly how you found it and how it looks after cleaning.

Start by sending them an itemized bill within the timeframe allowed by law. Demand payment within 30 days or threaten to send them to collections, take them to court, or whatever you plan to do.

If they don't pay, move forward with court, collections, etc.

Taking someone to court may get you a judgment, but that doesn't put money in your pocket. You typically need to send them to a collection agency or attorney. They will go after the money. Even then, your chances of collecting are pretty slim. I send tenants to collections because I get the comfort of knowing it sits on their credit report for many years and prevents them from getting loans or cheating another landlord.

Steve K. · Answer

I've had success here in CO by sending an itemized invoice and demanding payment with a nice note that if they don't pay I will be getting collections involved. If you do have to take that next step and involve collections, those companies take a high percentage but it's better than nothing. Just make sure you do everything by the book and within the required timeframe. If you don't follow the process perfectly (such as by not delivering notice on time, or in the right way, or charging unfairly such as for normal wear and tear) you will be SOL and could even end up having to return the security deposit or even pay them more $ above the security deposit.

Travis Timmons · Answer

Agreed with above - explore every low cost option to collect, but ultimately, it is the cost of doing business.

Michael Smythe · Answer

@Sara Valentine you may need to take them to small claims court to get a money judgment against them, which you can then turn over to a collections attorney.

Gregory Schwartz · Answer

Our process:

1. Call / Email the tenant and inform them of the situation providing all the documentation to support the bill

2. Email the tenant the deposit reconciliation per state law here in Texas

3. Give the tenant 1 month to pay the outstanding balance

4. Send them to collections

5. Learn from our experience

Adam Bartomeo · Answer

Our first step is to always contact the tenant with proof and the amount still owed. We try to work it out with them. The second step is to put them into our internal collections dept. The third is to hire a professional collections company.

Max Ferguson · Answer

Great advice Steve! New laws require a bit more attention to compliance. I would get with your property manager if you have one, or call one and offer a consultation fee for their time on how to go about structuring the invoice. You could gather all of the information from the internet but double checking with PM's would be smart as we had multiple changes in May as you know. Good luck and keep us updated, I will have to do this one day so it would be nice to know! Thanks

Sara Valentine · Answer

Thank you, Theresa, this is very helpful - I want to hear the truth, and move on! Thanks for helping me do that!

Damage exceeds damage deposit. What is my recourse?

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