Witholding Security Deposit due to Cigarette Smoking Damage?

22 Replies

Hi Everyone! 

I've got a situation that I believe I'm in the Right, however just got off the phone with the tenant and his anger and frustration has got me thinking twice. This is the deal. 

I bought the property 2 years ago (a 4 plex in NM) and inherited this tenant. He has lived on the premises for 7 years and left in June. He paid $675/month with a $500 security deposit. He smoked indoors and there was so much nicotine damage that I had to charge him for it. There was nicotine on the walls and ceilings. The appliances and light switches were all yellowed from the amount of nicotine. Everything in the unit (floor to ceiling) was wiped down with vinegar/water and then I shocked the entire unit using an Ozone Generator. 

His argument is that he specifically looked for a lease that didn't stipulate NO SMOKING so that he could smoke inside his home. Since the old lease with the old landlord was still in place, he says he is not responsible for that damage ... and that in fact, it is not damage ... that it is just the cost to a landlord to clean it up. My argument is that no, just because a lease doesn't specify every imaginable damage doesn't mean that it makes it okay. Smoke damage is still damage. I charged him not only for the wipe down of the entire unit ... but also for the KILZ odor primer. We never charge our tenants for painting to turn a unit ... but in this case I had to use a heavy duty sealant primer to ensure the stains and odors don't come right back up. 

His deduction detail actually shows that he owes me money ... but I was willing to not to collect. He is now asking for $250 of the $500 deposit. Part of me wants to offer him $100 to appease him and move on and avoid any potential legal costs. What does your experience tell you to do?? 

Here is the detail of his security deposit: 

Removal/Clean up of was, $75

Wall Repair, $150

Reattach bathroom bar, $25

Reattach Bedroom Door, $25

Reattach Closet bar, $25

Carpet Cleaning, $60

Ozone Generator, $49.99

Treat home with 40 hours of ozone generator, n/c

Clean walls of nicotine stains (16 hrs @ 12/hr), $192.

Clean kitchen flooring/appliances (8 hrs @ 12/hr) 

Kilz Odor Seal Primer 2-5g buckets, $304.

Application of Primer (48 work hours), n/c

SUB TOTAL 1001.99

Less Deposit (500.00) 

Total Due $501.99. 

I told him we decided to not pursue the collection of the $501.99. 

Appreciate your feedback, 

Lorraine 

I believe he's likely right about the smoking "damage" as being normal wear and tear. If the lease didn't stipulate no smoking, what baseline will you use in front of a judge to determine his smoking resulted in damages above "normal wear and tear"? If you walked the unit ahead of time you likely knew he was a smoker if he was there seven years and you've owned the place for two. Hopefully remediation costs were factored into your purchase price. At the end of the day, $250 is not worth getting sued over. Square up and get him to sign some sort of property possession termination where it is outlined the deposit return numbers are final.

Lorraine,

I just went thru this same problem with an inherited tenant.  What a nightmare to get rid of the smoke smell - how can people stand to be around it?  I think you were right in charging him for the primer paint and gracious enough not charging him to put it on the walls.  I would hold your grounds on this.  He won't sue you over $250.

What I have done with inherited tenants is to get them to sign my lease as soon as the old one is up.  Don't want to sign it, they can move on.  They can destroy someone else's property and not mine.

Jim

I disagree with @Mike M. .  Whether he was 'allowed' to smoke or not, the security deposit is in place to keep the property in the same condition as when he moved in, normal wear and tear excepted.  Smoking damage is not normal wear and tear.  I have had to remediate 6 units from it over the years and it is a huge pain.  All of my ads say in big bold letters - NO SMOKERS!  Not necessarily that this guy is - but every turd I have ever had has been a smoker.  I realize he was an inherited tenant and not the fault of your screening.

I would not charge for re-attaching the bathroom, bedroom or closet bars.  That could be construed as normal wear and tear from a 7-year tenant.  I'd give him the $75 and state in the settlement letter that this satisfied/concludes things. Up it $25 to get to that $100 number you like, maybe.    I do not pander to these people in fear of a lawsuit.  I am very fair and forgiving (too much so my wife says) but don't give in to crud like this.  Stand your ground and please keep us posted @Lorraine Pennington !

I think you're in the right. Allowing smoking doesn't mean any damage done by smoking is negated. 

Be able to provide receipts for work done and you're in the clear (in my opinion). 

He's not your tenant anymore so I wouldn't give him money just to appease him, that's not profitable and makes it seems like he's not actually responsible (which he is). You also have no moral or ethical obligation to give him back his money either. 

I say hold your ground and move forward.

The amount of damages you can collect depends on the average useful life of that item.
Example is that as a landlord you paint the walls every 5 years.
If you have to repaint the walls after a tenant lived in the unit for 7 years than this would be considered "Normal Wear and Tear" and you deduct $0.  Additionally if the walls only needed to be painted in one room then you can't charge a depreciated value for repainting the whole house just that one room.  

My opinion is that you will have a hard time receiving compensation for the ozone generator and the primer as if the original lease did allow smoking then the smoke smell in the unit is considered normal.  If the walls were cleaned then the "Odor seal" primer was an elective step and will probably be considered "Normal wear and tear". 

Refer to the California Department of Consumer's Affairs guidelines for the security deposit.

http://www.dca.ca.gov/publications/landlordbook/se...

Thank you @Mike M. , @Jim Shepard , @Steve Vaughan , @Alexander Felice

My goal is to get up to 20-30 units in the next 5 years and I must say that dealing with angry tenants is a huge turn off! lol. I've got to master the human relations side and not let these little "spats" affect me. So THANK YOU for your prompt comments. All have valid points and I've formulated a blend of your suggestions. 

I'm going to redo the deduction summary ... reducing or eliminating some of the items that could be wear/tear (closet bars/doors, etc). Hopefully taking some of air out of his anger by showing I'm conceding on some points. But I'm going to hold fast on the primer and the wipe down fees which is where all the expense is coming from. At the end of the day, it will reduce the total charges being accessed to him ... but it will still not show a refund. But more importantly, the remedy of the smoke damage are true and real expenses. I'm setting up the foundation of our property management business and I can't operate our business on fear. No way. 

I'll come back and update the thread and tag your names. It will all go down this week so here we go!! 

Appreciate your input again ~ thank you. 

Lorraine 

Yeah, most people wouldn't thank someone that points to actual California law on the matter if they didn't agree with them.  

Regarding the primer I hope you are aware that in California that if the correct amount of the security deposit is Not returned to the tenant that they can sue the landlord for the return of the security deposit, all court costs and expenses, and the judge may award the tenant the remaining amount of the security Plus up to 2x twice the amount of the security deposit if the Judge determines you withheld the security deposit in "Bad Faith"

http://www.courts.ca.gov/1049.htm

I hope you win.  I'm a landlord, so I feel your pain on this.  It hasn't happened to me yet, but I suspect it's coming, or something like it that causes pain.

Regarding the argument of normal wear and tear, you are going to have to prove the smoking did damage to the unit above normal wear and tear.  This requires a baseline property condition at initial leading that is indisputable.  Do you have that?  How do you counter the argument he'll make that the unit was like that when he rented it?

Smart business decisions aren't always the absolute right ones.  If you can eliminate the stress and anxiety of next week (and those after, if he pursues this) for $250 and focus your attention elsewhere, is it worth considering?

IMO, I'd charge for the towel bars and wall damage, and punt on the smoking if he pushes the issue.  

Best of luck!

Ask you attorney. The damage has been done but from now on you are in control. All my leases state that smoking is not permitted and that if they smoke in or on the premises that they forfeit the security deposit. I have them initial right next to that paragraph. Good luck.

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

I would not itemized it anymore. If you are going to work the numbers down toward his asking 250, I would give it rather than reduce all the lines because he will nitpick the remaining lines with the smoking stuff. If he was going to sue for smoking damage, then he might win it all back.

Simple put, you have no smoking clause, 7 years and thankfully out of there for 250?.....let it go !

@Lorraine Pennington In my experience the biggest key to dealing with people is managing/setting expectations. 

Do this on both a personality, and written basis. Meaning, say things that are in accordance with how you will act in the future. If you talk firm, but fold its not good for anyone. Same for if you speak like you're laid back but then later you act like a hardass. Setting expectations in a written form is much easier. Write what you expect to happen and enforce it, both to your and the tenants benefit. 

I agree with @Mike M. that the $250 isn't worth potentially being sued over. 7 years is a long time and whether the smoking damage is or isn't "normal wear and tear" the costs to get the unit ready should be factored in, so it shouldn't be a surprise cost. That said, I also hate smoking and don't allow it in my units either, but situations like these are part of the fun of inherited tenants.

Peter MacKercher, Real Estate Agent in MO (#2010004223)
(314) 210-4414

Woah @Jeff B. ! I wrote my thank you's and not until after I posted did I see your response. My vote on your comment was my way to thank you quickly as I was leaving my pc for the morning. Don't take it personal. So thank you, I like posts that provide factual links. 

I'm quite sure that I would not be dealing with this issue if I had screened the tenant from the get-go. But I inherited the tenant. And in hind sight ... and what I now know for future purchases ... is that I should have negotiated some funds during the purchase of the 4plex to cover this units turn over. I knew the tenant was a heavy smoker when I did my inspections. I knew it was going to be a challenge to get rid of the odor whenever he vacated. I knew all of this but I didn't address it at the time. So I will take the responsibility. This was my 3rd rental purchase so learning as I go but do wish I would have had the foresight to get some funds from the seller! 

I'm leaning towards countering his offer at $100 and calling it a day. I like the comment of "smart decisions not necessarily being the 'right' decisions that @Mike M. made. I'm going to sleep on it. I'll still update everyone on the final results. 

I don't take it personal.  I offer advice based on running my rentals like a business and the laws that govern our business.  It seems that when I offer some people (Not you) advice they will always end up doing what ever they want.  

The great thing about this forum is that there are some very knowledgeable and experienced people who offer you the same advice you would pay $100's a dollars an hour to receive.  Thanks Josh

Do Not be another spineless jellyfish and let someone take advantage of you.  This is a business and Not a charity.  If you like giving your money away I will take some, I have paypal for easy transfer.


The only items I see itemized that I do Not think a judge would allow are "Carpet Cleaning" unless in the lease, "Primer", "Cleaning of walls"  and the "Ozone Generator".  The other items seem fair and add up to $300.00   You will find out quick in real estate investing that hundreds turn into thousands turn into tens of thousands of potential lost profit.

Refer to "SUGGESTED APPROACHES TO SECURITY DEPOSIT DEDUCTIONS" in the 
Section 3. Repainting Walls

http://www.dca.ca.gov/publications/landlordbook/se...

@Lorraine Pennington

I think most people missed that the property is in New Mexico and not California?

If you deem these repairs to be more than ordinary wear and tear than deduct the money from the deposit.  It looks like NM requires interest to be paid on deposits so be sure to conform as such

I would not have caved on the money due so quickly but have used it to bargain with later if need be

Tenants will often threaten to sue but very rarely follow through.  Just be detailed with pictures, receipts and any other documents and you should do fine

The tenant would have to send you a demand letter before suing, so at that point you could negotiate if you wanted to.  The chances that they follow though, pay to file and for out of state service are slim.  If you feel you are in the right stay the corse

512-293-3885

You inherited this tenant , thats condition on the unit when you bought it .  The lease didnt forbid smoking , I think you would lose if he takes you to court . He could claim it was in that condition when he rented it . 

Originally posted by @Matthew Paul :

You inherited this tenant , thats condition on the unit when you bought it .  The lease didnt forbid smoking , I think you would lose if he takes you to court . He could claim it was in that condition when he rented it . 

Actually that is not true.  you assume the position of the previous owner who initiated the lease and the condition when the leased it.  Meaning....the condition and terms when they lease it is what you assume.  Damage above normal wear and tear from the time the lease was enacted apply. 

512-293-3885
Originally posted by @Greg H. :
Originally posted by @Matthew Paul:

You inherited this tenant , thats condition on the unit when you bought it .  The lease didnt forbid smoking , I think you would lose if he takes you to court . He could claim it was in that condition when he rented it . 

Actually that is not true.  you assume the position of the previous owner who initiated the lease and the condition when the leased it.  Meaning....the condition and terms when they lease it is what you assume.  Damage above normal wear and tear from the time the lease was enacted apply. 

It may or may not be true , BUT if it ends up in court  the burden of proof will be on the landlord . I dont see the landlord winning 

Hi All, 

I wanted to circle back and give an update as its been a few weeks. I appreciate everyone's input and quite honestly, I was a bit confused the day I posted this since everyone had their own point of view. I slept on it and decided to hold firm. The smoke damage inside the home is real and I felt no reason to give into the fear of the possibility of being sued. 

I sent him a very nice, yet firm email back explaining our position as a landlord and attached the 143 pictures of the unit. I also provided to him credible websites that explained how difficult it is to get rid of smoke, regardless of the cause (ie cigarette, fire, etc).  There certainly exists a risk of him still coming back at me, but as of now there has been no response. 

Many thanks again, 
Lorraine 

Your itemization to $501.99 on a $500 deposit seems too exact. If you presented this to a tenant they are going to think you are just trying to screw them out of a deposit. I would add in a charge for the rental of the ozone generator.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

Hi @Russell Brazil ! The expenses totaled $1001.99 and then less the 500 deposit it settled to 501.99. The costs were the costs so there isn't much I can say to that ... other than to reiterate that I was not out to screw anyone. Here is the revised summary of his deposit: 

Removal & Clean Up Of Wax $ 75.00

Wall Repair Throughout Home $150.00 130.00

Reattach Bathroom Bar $ 25.00 0.00

Reattach Bedroom Door $ 25.00 0.00

Reattach Closet Bar $ 25.00 0.00

Carpet Cleaning $ 60.00

Ozone Generator (kill smoke odor) $ 49.99

Treat home with 40 hours of Ozone Generator $ n/c

Clean walls of Nicotine stains (16 hours @ 12/hr) $192.00

Clean Kitchen flooring/appliances (8 hours @ 12/hr) $ 96.00

Kilz Odor Sealer Primer 2-5g Buckets $304. 00 0.00

Application of Primer (48 hours) $ n/c

Sub-Total: $1001.99 $602.99

Less Security Deposit: (500.00)

Total Due: $102.99

Join the Largest Real Estate Investing Community

Basic membership is free, forever.