Tenant Security Deposit AFTER Move-In?

6 Replies

My property management company is a large, reputable turnkey company. I’m getting ready to purchase another property with them. I was going through my two existing leases with my two existing properties with them. I noticed that they collected a security deposit on one tenant and not the other. The tenant they didn’t collect a security deposit on was an existing tenant that moved to another one of their homes (mine) under management. I am planning to inquire to the property management company as to why there was no security deposit collected for this tenant. Are they able to collect one now after the lease is already signed (1-year lease), or do they need to wait until lease renewal? If they collected one for the previous home the tenant rented from them, assuming it wasn’t used up on the other property, is it reasonable to ask that it be transferred to my current propert that the tenant is actively occupying?

It could have been transferred but you would really want a paper trail that states that, if they can't come up with a good explanation this would be a huge red flag.

Originally posted by @Mark S. :
My property management company is a large, reputable turnkey company. I’m getting ready to purchase another property with them. I was going through my two existing leases with my two existing properties with them. I noticed that they collected a security deposit on one tenant and not the other. The tenant they didn’t collect a security deposit on was an existing tenant that moved to another one of their homes (mine) under management.

I am planning to inquire to the property management company as to why there was no security deposit collected for this tenant. Are they able to collect one now after the lease is already signed (1-year lease), or do they need to wait until lease renewal? If they collected one for the previous home the tenant rented from them, assuming it wasn’t used up on the other property, is it reasonable to ask that it be transferred to my current propert that the tenant is actively occupying?

 That is a no gooder. What they should do is treat all tenant's moving to new properties within their portfolio as any other arms length tenant. A new application fee and background check would be overkill of course, but they should be collecting a brand new deposit and treating the old deposit as a completely separate issue. The owner of that property is not the owner of your property and the deposit's should be treated as such.

Originally posted by @Mark S. :

@James Wise, @Aaron K.

Would it be reasonable / legal to ask the tenant to now provide a security deposit while in the middle of the lease?

No. Lease is already a done deal. Can't stay dry if you've already jumped in the pool.

@James Wise Okay, thanks. I will at least inquire with the property manager as to why there was no security deposit taken and if the tenant renews their lease, hopefully they’ll require a security deposit when they sign the lease renewal.
Quick Update: Property manager said they DO have a $500 security deposit for the tenant in escrow (which aligns with the monthly PM statement that says $500 deposit) and are not sure why the lease states otherwise. The bigger issue that was recently brought to my attention is that the tenant was $32 short on her rent for July. They told me she will pay this shortage, plus August’s rent, by this coming Friday, August 17. I inquired as to whether or not this appears to be a one-time thing or an ongoing issue. While they didn’t provide much information, they reminded me of this tenant’s stellar payment history over the past 2 years (she previously lived in another property they managed before it was supposedly sold) and said they had no reason to believe she wouldn’t come through. I’m a little uneasy about this because $32 seems like an amount most people should easily be able to come up with. Also, I was never given an option to refuse to accept rent other than the full amount nor to proceed with eviction. I’m anxious to see what happens this Friday and hope everything gets paid and we’re good to go from here, but I’m certainly not happy about this.