Greenwood, IN · Member since 2013 · 346 posts · 93 votes
If I took a security deposit, that was from one of the tenants on the lease.
Two people signed the lease. When the security deposit is returned, do I cut two checks, to both tenants for half, or just to the person that wrote the check?
Unless directed otherwise by all tenants I cut a check made out to "Tenant 1 & Tenant 2" and then they'd both need to sign it and then do whatever they want to do with it. Anyone on the lease would be entitled to the security deposit unless it's stated otherwise.
I'd spell it out with a written paragraph in the lease something like:
"Deposit was received from tenant X and the return of the deposit will be to tenant X only. Tenant Y has no claim to deposit amount from the landlord and any return funds due to tenant Y must be negotiated between those parties directly."
Then have both of them initial/date that they have read and understand it. That keeps you out of any of their personal disagreements later when they move out.
If they've already moved out and they aren't agreeing, then cut the check to the person you got it from and have them sign for receiving it with a similar paragraph:
Deposit amount of $XXX was returned to tenant X, who paid the initial deposit in the amount of $XXX. Any claims by tenant Y to the deposit must be made directly to tenant X based upon any prior arrangements they may have made without the landlord's knowledge. Tenant X acknowledges that they are solely responsible for returning any monies due to tenant Y.
Again sign and date.
Obviously if you're not under the gun dealing with the move out right now then do the first one to keep from having to figure it out later.
(This is not legal advice and you should consult someone local to ensure the correct process and language to avoid possible liability.)
Well that would be ideal, with that being said, both are claiming they are owed half. I am wondering what is the legal way in Indiana of dispursing the security deposit. When one persons check paid, but both people are on the lease?
Unless directed otherwise by all tenants I cut a check made out to "Tenant 1 & Tenant 2" and then they'd both need to sign it and then do whatever they want to do with it. Anyone on the lease would be entitled to the security deposit unless it's stated otherwise.
I accept only one forwarding address, and make the check out to both tenants with an 'and' like @Patrick L. . That requires them both to sign the check.
I send out a letter saying the deposit will be returned in all their names unless I have a written permission from all of them to split it evently. If I have written permission from them to split the deposit equally I split it and send it to them seperately. Otherwise I use name 1 and name 2. I make copies of the checks they give me in the beginning too. Happens a lot with students.
Well that would be ideal, with that being said, both are claiming they are owed half. I am wondering what is the legal way in Indiana of dispursing the security deposit. When one persons check paid, but both people are on the lease?
Thank you,
If they both want half, what's the issue? Just send them each a check for half and call it a day!
I've had, and have, roommate situations (and couples) and will not get involved in who is owed more of the security deposit for any reason. To manage my accounting, I write one check, and the tenants need to agree upon lease signing who will get the deposit check.
My lease states it this way:
More than One Tenant-Return of Security Deposit. If more than one Tenant signs this agreement, and the landlord is required to return all or part of the security deposit to the Tenants, the Tenants agree that the landlord can return the security deposit to the following Tenant: TENANT NAME. The landlord will return the security deposit to the Tenant named above, unless all Tenants tell the landlord in writing to return the security deposit to someone else. The security deposit CAN NOT be used as the last month’s rent.
Bumping this - how do you guys handle an apartment with multiple tenants where half move out and new roommates move in? Do you assess the condition of the apartment right there and give some of the security back to those who moved out and request security for those moving in?
Deposit is mailed out or they can pick up but if multiple tenants, all names on one check they can figure out how to cash it themselves.
Mail out within time frame to first person listed on lease, or as directed or to wherever they moved from to be forwarded.
YOU better check your state landlord tenant laws,, each tenant still on lease is entitled to equal portion of deposit refund,, they can't sign away the right to another roommate,, So make sure you follow the law.... not somebody else idea of what's correct.
In regards to the security deposit you do nothing. You continue to hold the entire deposit and the outgoing, incoming tenants work out the deposit between them.