Security deposit question

11 Replies

Hey BP family, Wanted to reach out to you guys here. Question I have is that I just closed on his duplex, and one of the tenants is not renewing her lease and is suppose to vacate at the end of this month. From my understanding of the previous management company she has not paid her last months rent for this last month of July yet. But we have her security deposit, can we not give her anything back and keep the security deposit for the month of July? Or do we have to give it back to the tenant if the property meets the requirements after walk through of inspection? Let me know your guys thoughts and how you will handle this situation. This is my first time owing a rental property.

Hi @Koob Moua I am not a landlord but a renter currently.  From my understanding if the tenant does not fulfill the agreements in the contract then you can withhold the security deposit.  In the agreement they agree to pay X amount per month, and if they don't then they are in violation of the agreement and you (the landlord) can then keep the security deposit.  At least that is the way it is set up on my agreement.  Hopefully someone with a little more experience can give you some more insight.

A security deposit can be used to satisfy unpaid rent.  Of course, then you won't have anything leftover to cover any damages, which is why most leases prohibit tenants from using it as payment for the last month's rent.

Well this tenant always pays late from looking at the past rent statements and that’s one of the reasons why the previous management company is not renewing her lease from what I suspect. Since now I am the new owner and not using the property management company from previously and when we closed the agent told me that she will be leaving by this month and she has not paid her rent this month.

I'd do a walk through ASAP.  Get a friend to pretend to be a new tenant if you are uncomfortable doing it alone, but you need to know the condition of that place.  If there is damage then you need to start eviction proceedings, since she

 1. owes rent, and 

2.  not enough deposit to cover rent, damage, cleaning, etc.  

Get her into court, get a judgement.  

I agree with Terre! You want to make sure you have enough money for damages when the tenant moves out. Usually tenants like that will not properly care for the unit, so I would make sure you will be able to cover the cost of turning over the property. 

I realize it is a little too late now, but never let a tenant "live out" their security deposit.  They will have ZERO incentive to leave the place in good condition.  If you're lucky, they'll leave you with a filthy place, but at least won't have any damages.  However, I'd bet dollars to doughnuts there are also going to be damages.

Generally speaking, tenants who pay their rent on time return their units in a good, clean condition.  Tenants who aren't responsible enough to habitually pay their rent on time (or at all), are much more likely to also be irresponsible in how they take care of a place.

You wouldn't necessarily think those two things are related.  Yet I have seen it time and time again.

Even if they're supposed to leave at the end of the month, I'd still file a 3 or 5-Day Pay or Quit notice (whatever it is in your jurisdiction).  Because you're assuming they'll leave at the end of the month.  They may not.  At least by serving that notice, you can immediately file for an eviction if they are still there on the 1st. 

Originally posted by @Reginald Moore :

How long does an eviction take and how much does it cost? Seems like a lot of time and money to waste on somebody that is leaving anyway.

 You begin the eviction process the day rent is late. This is because you have no guarantee that they are "leaving anyway" What happens if they are still there on Aug 1 and no rent is paid? You will have wasted a whole month that could have been used to begin the eviction process. In addition, beginning the process shows the tenant that you are a professional and intend to protect your investment, which may make them rethink trying to take advantage of you. It is simple and easy to begin the eviction process, and you can always stop it if tenant pays rent or moves out.