Partial Security Deposit and Selling Property, How to handle?
I'm in the process of selling a duplex. One of the tenant security deposits only partially remains, and I'm not sure how this should be handled. Any advice?
- Tenants paid $650 when moving in
- A few months later, tenants caused some "loss of income" as a result of violating their lease terms (Marijuana use and resulting excessive odor caused an AirBNB guest in the upstairs unit to cancel their extended stay early, costing me $450 in income).
- Via text-thread, Tenants agreed to (a) stop MJ use, and, (b) accept that I was taking the $450 out of their sec. deposit to cover the loss.
Now (about 6 months later) I'm selling the property and I'm not sure how to handle the fact that only $200 remains of the security deposit and that the only documentation of this is an old text thread. Did I mess up with documentation, etc.?
Thoughts?
Hi @Bruce Gardner! The simplest thing that can and should be done is to have an affidavit signed by both parties stating that “$450 was detracted from the Security Deposit for X purpose” and stating the remaining balance. Then you should keep this on file, provide it to the tenant, and provide this to the buyer along with the current leases and Operating Financials (if you are giving these). That way they will underwrite it correctly and you’ll have done what should be sufficient in the situation.
Your state’s tenant-landlord laws may dictate something different is needed, so you might consider taking a PM out to lunch and walking through this.
