Security deposit refund: pissed off tenants

16 Replies

I have a tenant move out recently from a 4plex that I bought last year. She left me a horrible mess! I am spending about 4k to fix up the place. She noted no defect with the unit on the move-in inspection check list (I inherited her as a tenant). I decided to keep her $600, which is way lower than what it's costing me. Now she is hopping mad! Wants to take me to court etc! How do you deal with a situation like this? She is saying that the unit was in worse shape when she moved in, but I have no way of verifying it!

How do you handle situations like this? I am almost tempted to give her the $600 back as going to court etc will not be worth my time, but at the same time I just don't want to give in!  I have not really dealt with situations like this, so any thoughts will be appreciated.

You have a copy of her original signed pre move in inspection checklist.  Take pictures of the material defects upon her moving out.  In the unlikely event she takes you to court, (cost her more in attorneys than the lousy $600), you'll be covered, most likely. 

Disclaimer:  I am not now, nor have I ever been, nor will I ever be, an attorney of any type.  Heed my advice accordingly.

do u have pics when you fist bought it?

take pics now and send them to her to see the mess she left. that will calm her down, trust me.

lastly, let her start the court process, you can always offer to pay her back. good luck!

Did you provide an itemized list of what costs you're withholding for specific damages? If not best get on that right away. Even if the damages exceed what you can collect against still list it out. First this is probably required by you local laws, so you stay out of trouble. Second if you do end up in court it gives you what you need to demonstrate to the judge the reason that you kept the entire amount.

First check your state laws regarding security deposits.

If we have a tenant that trashes a property, we cannot just automatically forfeit their security deposit and we have 30 days to send the tenants an itemized list of charges against their deposit.

In Texas if an owner does not follow proper procedure even though the tenant trashed the property, the tenant can go back after the owner for triple the security deposit plus attorney fees and court costs.

If you accidentally did not follow your state laws, I would immediately refund the total deposit.

If you followed your state laws, then you should have at least contractor invoices for the work done to justify the expenses against her security deposit. Again, please be sure you are following your state laws. In Texas we cannot charge for normal wear and tear.

Tenants normally and routinely challenge charges against her security deposit.

We typically take on average 300 move-in pictures and 300 without pictures plus video. You cannot have too many pictures.

It is fairly easy today for an owner to take lots of move-in and move-out pictures and video off your smart phone. You can upload your videos to YouTube and keep them private, until you need them. Also, you can create a folder in dropbox for each of your rental properties and store the move-in and moveout pictures.

When we do charges against the tenants security deposit, we send them a copy of move-in picture with a copy of the move-out picture, this greatly reduces tenants protesting the charges against her security deposit.

Document document document.

@Jon Behlke Thanks for the advice.

@George P.  I didn't take pics when I bought the property as the unit was occupied, so I didn't go in to document it in detail (I probably should have). However, I can tell you that the unit was in similarly messy condition! 

@Matt Devincenzo I did provide an itemized list. 

@Account Closed Thanks for the great advice. I do take some pictures, but don't do a very good job on that. I need to get much better at documenting the property conditions! Landlords that own more than 10 rental units in Georgia are held to higher standards per state law. I do fall into this category, so I try my best to follow the process but there is room for improvement!

Hello Kazi,

Yes it is a lot harder when you purchase the property with the tenants already in place.

I really like the move-out video, if the tenant complains that he left something clean that was not I can always email them a link to the YouTube video.

Kevin

"Mess" may not be a legal damage to the property. Security deposits are for damages caused by tenants. I now have a "cleaning" clause in my leases allowing me to charge a cleaning fee when they vacate. Paint is generally not something you can charge for even if you painted right before they moved in. Know the difference between "wear and tear" and damages. Wear and tear cannot be deducted. Damages can be. Be sure you follow Georgia laws not only in making claims, but also any laws regarding holding the deposits. You never want to be in front a judge and show that you are not in compliance.

No company avatar mediumJohn Thedford, John Thedford | 239‑200‑5600 | http://www.capehomebuyers.com

Sounds like you have no real documentation on condition upon tenant move in. Tenant can pretty much say what they want and judge will be in  their favor. I just took over  a unit the tenants left and it needed major rehab. only thing i got them for  some flooring damage they admitted to being from their couch

Tenants don't seem to dispute unpaid rents as much as they dispute security deposit deductions.  It's pretty cut and dry that they did or didn't pay rent.  But the tenant's housekeeping skills were below par? Well, them's be fightin' words!

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

@Byron Bohlsen I do have move-in checklist (got it from previous owner) signed by the tenant, but tenant marked everything to be in good condition. Is that good enough or I need further proof?

@John Thedford If the paint is ruined so badly that I am forced to paint again within 2 years, can be considered beyond normal wear or tear? Is the same true for carpet?

@Account Closed Love the youtube idea! Will try to incorporate it! :)

I haven't been doing this long enough to know that's good enough or not. maybe more experienced will chime in. Good condition to them might still mean the scratches on the floor the cracked trim around the Window.  Pictures are a must to protect yourself imo. 

@Dawn Anastasi

 House keeping skills? What house keeping skills?!? LOL 

I have been renovating and improving the units as the inherited tenants move out (and also am getting a lot more rent as a result!)! I know I will have lot less headache to deal with with this higher quality tenant base.

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Tenants threaten to sue all the time. They rarely do. And if you follow the law on security deposits you will win anyway. I would not let a tenant intimidate me that way. I have had a case recently where the tenant was hopping mad and threatened to sue etc but nothing ever came of it. Do what is legal and appropriate and don't worry about the emotional state of the tenant. Thats why you collect security deposits in the first place right?

@Kazi R. welcome to the world of landlords, proven to never be boring. Calculate the time and effort you will be spending dealing with the tenant. If it exceeds $600, just return the deposit. Lesson learned and move on. 

This is why I always preach the importance of creating a foundation first before entering into investments. Having an attorney on your team means that this situation is one email/phone call away and you have saved yourself lots of time and headaches.

Good luck,

Damir

"If it exceeds $600, just return the deposit. Lesson learned and move on."

@Damir Kamber That's exactly what I did! I gave the security deposit back as I didn't have great documentation about the condition of the property (She moved in before I bought the property), and also upon further communication with her, I sort of believed her that the unit was almost in as bad condition when she moved in 2 years back. I always advise my tenants to mark EVERYTHING on the move-in inspection checklist, but it appears that it's not made obvious to prospective tenants by some landlords / property management companies. I don't think she understood how she was supposed to document the damages on the checklist. Anyway, like you said, lot of lessons learned from this ordeal! :)