Property Manager did not keep records, Security Deposit issues

6 Replies

Hi,

we recently changed property managers after having the same one for several years. We started to have issues i.e. checks were starting to come in late, hard to get in touch with, and so forth so we were happy to hear that the PM wanted to retire. The change coincided with the tenant of 7 years moving out. The new property manager gave us an itemized report with photos outlining $7K of necessary repairs and make ready after an inspection of the property. We think some of the charges should be charged to the tenant i.e. cleaning, carpet repair (new carpet was installed during tenancy), damaged cabinetry, drywall damage, damaged doors, missing window screens and frame damage, burnt out light bulbs, trash removal, neglected yard maintenance etc. There is more but these are the ones we think the tenant is definitely responsible for. Out of the $7K we think tenant part is about $2.2K and Security Deposit is $1.2K. Our problem is that the both the previous PM and her broker refuse to do the itemization of the security deposit, PM did not do a move-in inspection (refers to Texas standard lease paragraph that says tenant should have turned in Inventory and condition form within 45 days of lease commencement), does not have any other documentation regarding property condition, and dropped off the security deposit check of at our new PM. The new PM says they cannot do security deposit itemization since they were not the property manager and do not have any documentation about move in condition. They now deposited the Security Deposit into our account. We're caught in the middle and we're getting close to the 30 Days in which we have to send notice to the tenant. 

We would at a minimum want to keep the Security Deposit and ideally charge the tenant for the overage. I am wondering though how much solid standing we have here since there is no documentation of the move in condition other than the lease specifying that property was as-is and that tenant was obligated to turn in Inventory and Condition Form within 45 days but failed to do so and therefore property is deemed free of damages at time of move-in.

Does the previous PM/Broker have any liability for not keeping property condition records?

Any thoughts on how to handle this?

Thanks

You have to return their security deposit.   Poor record keeping is not justification.

You might go after the security deposit in small claims with the property management company, on the basis they did not competently perform the move in.  


We're based in California, so not wanting to get too specific with you as the rules are different here. 

All the best.  :(  

@Petra Handrigan do you have any photos of this property from back when it was listed/rented? Anything to fall back on?

If not, I’d definitely be wary of charging the tenant for anything that might not have been their fault. Also 7 years is a long time and a lot of standard wear and tear can happen in that time.

I’d focus on those things that you’re sure weren’t a problem when they moved in.

This is state specific, so you need to know your state law, but I think you might have reasonable success for obvious damage - holes punched in walls, for example - but you probably will lose if you have to go to court on the rest. Your redress will lie with suing the previous property manager most likely.

For the amount in question I would make repairs and move on. Just because the property manager didn't do those things doesn't absolve you of responsibility to see that you have that information. You should have requested a copy when they moved in. If the tenant really did 2k worth of damage in 7 years, that works out to less than $300 per year of tenancy. 

I suspect if you withhold deposit money for a few reasonable or obvious tenant damages, they would be unlikely to contest it, but know there are lawyers out there that make their living on the 3X+legal fees and will often take these cases on commission.

The MOST important part of this is to provide an itemized list and/or refund with 30 days of tenant move out and being given a forwarding address in accordance with Texas law or you are basically toast and could be liable for 3x the deposit 

As to the deductions, my advice Is to always deduct only what you are prepared to defend. By your post, it appears that you could not defend the difference in the before and after condition of the property if you were forced to in court. 

However, it appears that damages were done. The reality is there is a very small chance the tenant would pursue an action against you.