Tenant Deposit Return

8 Replies

I have a rental lease for 1 year which is up 11/30/17.  The tenants are fighting over various things and they plan on not to renewing the  lease.  One tenant says the entire deposit of $750 is his and wants me to return once I verified the property has no damages.  

The deposit was given to me in cash.  The tenant who wants the 100% of the deposit is the one who does not pay his fair share to the other tenants.  The other two tenants are trying to take him to court to collect what is outstanding between them.  They always pay me rent for the entire rent payment.

What should I do with there deposit?

Please help.......

Make a check out to all of them so they all have to sign it and let them fight it out....not your problem!

did you open an sec dep escrow account? Who's SS number ?

If you can not tell, then to all names on the leases

Also, whoever you decide on, just make sure a letter states it in advance so everyone knows sooner versus coming to you afterwards demanding money.

Great advice!  I don't have one SS# associated with this deposit....  Don't want to go to court over it..

Putting all three names on the check seems like a home run

@MARK MULATTIERI I ran into a similar situation and had thought for a while to write a check payable to ALL tenants. However, my bank teller told me that an app or website deposit software may not be checking the signatures as diligently as a human teller, which means that the check could still get deposited into one tenant's account without all signatures. 

Therefore, I told my tenant to agree on the individual return amount and then I prepared a form with the agreement and had all of them to sign. If they cannot reach consensus then I will hold the security deposit in an escrow account until they do. Hope that helps you.

@Wei Xie @MARK MULATTIERI  You are not responsible for how the check is endorsed.  It is the banks responsibility.  Make the check out with the names of the tenants as listed on the lease and don't worry about it. It's their problem, not yours.

I agree with the suggestions made by the others.  One check, made out to all three tenants.

In addition, be aware of the time limit you have for returning the security deposit (minus any rent owed and damages above normal wear and tear).

I have a feeling the tenant who claims to have provided all of the security deposit is going to want the security deposit the day he/she moves out.  Doesn't work that way.


Your state landlord laws may have stipulation on what you need to do.. but usually 1 check written out to all 3 tenants.. so probably let them know ahead of time you will need a forward address to send it to.. 

I agree with Eugene!  Send it to all three and let them figure it out. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.