TN Security Deposit Deductions Question – Estimates Allowed?

Question

Hi all,

I’m managing a rental property in Memphis, Tennessee, and I’m in the process of returning a tenant’s security deposit. I want to make sure I’m handling this by the book.

It seems landlords are allowed to base deductions on reasonable estimated repair costs rather than only on completed work with receipts.

My questions to the community:

• In practice, do you all typically deduct based on estimates, or do you wait until the work is done and then use actual receipts?
• Any best practices you’d recommend for keeping deductions “reasonable” so they don’t get thrown out in small claims court?

In practice, do you all typically deduct based on estimates, or do you wait until the work is done and then use actual receipts?

Any best practices you’d recommend for keeping deductions “reasonable” so they don’t get thrown out in small claims court?

I’m also mindful of the 30-day deadline in Tennessee to return the deposit or send the itemized list of deductions, so I don’t want to miss that window waiting for repairs to be completed.

Would love to hear how other landlords in TN

Thanks!

Isadore Swartz · Answer

My first question is why will it take more than 30 days to complete?  You should be able to pretty much rehab a whole house in that time.  How much tenant damage are we talking about?  Be careful to separate tenant damage from normal wear and tear replacements. My last tenant was charged $700 for all new blinds (dog damage), but my actual rehab was paint, flooring, concrete leveling and more (all wear and tear).  Took 45 days to complete it all, but the actual tenant portion (the blinds) was a simple Lowes receipt for the blinds. Yeah I did not charge for the blind installation but was a 1 hour job.

If you are really concerned about the 30 days reach out to the former tenant and see if they will work with you to insure accuracy in charges.  Was any of this damage discussed in the exit walkthrough? I have found almost all of my tenants will work with me in the odd situation regarding delayed accounting.

Theresa Harris · Answer

I agree with Isadore-if the scope of work is going to take more than 30 days, the tenant knows they aren't getting their deposit back.  You should be aiming to get the inspection done ASAP after they move out (ie 1-2 days), photograph it (and send them copies), then line up people to come in and do the repairs.  You also want to get the house rented ASAP as the owner isn't going to want to lose more than a month's rent.