Tenant Moved Out 1 Month Early - Security Deposit Deductions?

Question

This was my first rodeo as a landlord and I think it went fairly well.  My wife and I rented our primary residence for 6 months to a family that paid rent on time and were generally easy to deal with.  We rented our home for a short term to help save some money for major renovations.

They were set to move out on October 15 and a few weeks back the tenant called me and asked if it was OK for him to vacate early (Sept 15) if he paid 1/2 month's rent.  I agreed to this over the phone - he wanted me to deduct it from his security deposit (NJ) but I notified him that I would need the 1/2 months rent and we would figure out the security deposit after move-out

It took him a few more days (Sept 19) but they finally moved out.  I got in the unit today and there are a few things wrong with the property:

Smoke smell throughout - yes I have no smoking in the lease

Stuff everywhere, furniture, tables, bed, chairs, power wheels - stuff everywhere that will require a dumpster to remove

Damage to downstairs ceiling from upstairs leak, broken utility sink, damage to garage door, paint on garage floor.

Not sure why or how or what, but there was a 3-pack of "Bed Bug and Flea" Bomb cans with 1 can missing - please help me on that front!!!!

There are a few more issues but I don't want to run on.  I don't really know how to proceed.  The lease states that early termination of the lease would result in the balance of the lease term being due.  The deposit is 1.5 months rent, so that would be 1 month there but I don't know how proceed as I verbally agreed to let him off with 1/2 month.

I'm a little overwhelmed and annoyed that the place got trashed and crap was left everywhere.  I am going to be moving into this place as my primary residence after some serious renovations so from a damage standpoint this isn't breaking the bank since carpets, some walls, kitchen, etc will be all torn out and replaced.

Any advice?  Thanks in advance!

Paul Le · Answer

glad it helps. The damage is done and Do what you need to do and keep it off your emotion. You must be proud of yourself that you managed for them to move out mutually. It can be worse if they do not move out.

Tim Dastis · Answer

@Paul Le thanks for the advice  I won't be attempting to rent the place ASAP as I will be renovating the place and making it my primary residence.  I have plenty of pictures of the damage- I do have before pictures but not incredibly well documented (lesson learned) so hopefully that won't kill me

The money is likely there in the budget to do a lot of the repairs but since I am turning this into a renovation it will probably be performed by myself to save on total cost (I won't touch this money as part of the renovations of course).

Good to know.  If it came down to court I am fairly confident I would win with ease due to my lease and documentation, but it is always scary as a first time landlord.  I am currently purchasing a triplex investment property and I'm glad to have learned some lessons from this experience

Paul Le · Answer

here are the few notes i take from my attorney.

1) Even though you are agree for them to move out early, they are still liable for the full term. However, you have to make your attempt to rent the place ASAP.

2) Damages. we need to take pictures of everything and comparing with the move in pictures

3) If you have enough budget in your deposit to hire someone to do the work and provide receipt it will be great. If we do the work our self we can only show material cost.

4) They always threat to sue you but it is hard if you keep records of the damage.

Tim Dastis · Answer

@Mike McCarthy I definitely agree - the problem is I never got any of this in writing, and he is already threatening legal action if I keep his security deposit.  I'm not worried about anything holding up in court (if it even comes to that) but I want to make sure I do everything by the book to make sure I don't get screwed.

He's already made comments like "I'll just say you kicked me out" and "you're gonna end up owing me a lot more than this" etc etc so hopefully this will work out

David O · Answer

Oh yeah I would definitely put the 19 days in there if it was me, as you both agreed to that.

Tim Dastis · Answer

@David

@David O I was just referring to the as-agreed 1/2 months rent.  The tenant stated that he would pay that, but then did not.  Is it acceptable to pull that out of the security deposit?

David O · Answer

I have no advice on that, you may want to consult an attorney regarding that. I personally wouldn't do it as you told the tenant you wouldn't verbally, but I'm not sure of the legal ramifications.

Tim Dastis · Answer

So I called some pest control companies - since the place is vacant and there's only one bed leftover it'll be difficult to find the bedbugs if any exist.

I agree that it is a bit shady to enforce the lease when I said otherwise.  I guess my other concern is whether or not it is legal to take the .5 month's rent out of the security deposit.  I don't want to include this amount into the deductions if it'll bite me in the ass if he decides to sue.

Any advice on the legality?

Tim Dastis · Answer

OK - how do I go about calculating all these values?  For example, I'm going to be removing the carpet and refinishing the hardwood underneath (DIY) but that may not happen for a month or so.  I will paint the entire place, but not for 3 months or so.  Smoke damage I know can be very costly, but how do I go about pricing that out?

Sorry for the beginner questions but I just want to cover myself in case we get into a legal spat