Security Deposit for Room Rentals

4 Replies

How do you manage security deposits for a non owner occupied apartment rented out by the room? If there is damage to shared space ie: kitchen and bath, do all tenants become responsible or must the landlord cover this? 

If the security deposits for room rental do not cover common areas does that mean the landlord is responsinle for upkeep of this common area (kitchen/bath)? For example If a light goes out in the kitchen the land lord must replace the bulb, but if a light goes out in the bedroom the tenant must replace the bulb.

Frequent walk throughs will minimize damage. You are likely on the hook for damage caused in common areas. You are responsible for maintenance (light bulbs) in common areas.

My lease say that tenants are jointly responsible for damages to common areas.  I do common area maintenance since that gives me a reason to be in the unit regularly. 

Actually, I have always had one tenant admit to the damage so other tenants did not get charged.

@Barry Sanders - I have done a lot of college rentals where there is a shared common space, and each room is on its own lease. Always take a security deposit. And in the lease we make sure to say the are responsible for the common space.

Even if you had a whole house rental, there is a chance damages would exceed your security deposit. In this case, you pursue them. To me this is no different for a room rental. If there are damages above the deposit, I send a letter outlining damages, show where the deposit was applied, then give them 30 days to make a final payment or make arrangements. If I don't have the funds, I pursue legal action. This can be as simple as turning it over to a collection agency, going to small claims court, or hiring an attorney. 

The level of action I take is based on how much the damages were, and how confident I feel that they have the funds/income to pay. If I know they are paycheck to paycheck, I just turn it over to a collection agency. Now if I feel they have assets, I will pursue a judgement.  

A specific example I had with a room rental situation is where I had a property fire. One or all of the three tenants were cooking dinner (none of them wanted to admit who it was), they were frying something in a pan, it flamed up, they then dumped it in the sink and turned on the faucet. This caused a giant flame which then activated the sprinklers. There was minor smoke damage, but a lot of water damage. Luckily the sprinklers got turned off quickly. The tenants then admitted they cancelled their renter's policy, which was required by the lease.

As the damages came to about $22k, and under the master HOA policy deductible limit, and none of the tenants wanted to admit fault when I nicely approached them with the bill, I called my attorney. My attorney wrote a stern letter which demanded payment, and threatened legal action. It cost me about $400. The letter was sent via email to them, and certified mail to them and their parents. We had a very quick response, and funds paid in full in less than 30 days. To this day I still do not know if they all chipped in, or one of them paid, but we pursue all of them as it was common space.

@Andrew Kerr thanks for sharing your personal experience. My concern was, like in your situation, the responsible party would not admit fault to common area damage. Creating accountability via security deposits covering this area seems to be the fairest solution. If a tenant has to pay and they know theyre not responsible, they will be upset so they will ensure that they and their room mates take good care of the property. 

@Ray Harrell. I figure the landlord is responsible for common areas external to the apartment (hallways, entryway etc) but common areas within the apartment (living room, dining room, kitchen,bath) should be shared responsibilty of tenants. This would encourage them to take better care of common areas if they know its not the landlord's cost to fix it. For example if the landlord provides lightbulbs for the kitchen what would deter tenant from swapping it for the lightbulb in their room? And of course screening is key but this is just a hypothetical question to illustrate the point. 

@Ron H. This makes the most sense to me and is the ideal situation. Thanks for your input