Tenant threatening legal action over security deposit

Tenant threatening legal action over security deposit

New to Real Estate · Portland, OR · Member since 2020 · 17 posts · 4 votes

Hi Bigger Pockets -- I have a situation I'm not sure how to deal with, am hoping for your help. For context, I am a new investor who is househacking my first property; at this time I do not have a lawyer, and the house is in my personal name (rather than an LLC).

I have former tenants who recently moved out, and they took it upon themselves to "fix" the pinholes where they hung pictures. They accomplished this by painting large, discolored squares in multiple areas, of every wall, of every room (with only a couple exceptions). The color difference was not subtle, I've attached some images for reference (links below) -- it was like this through the entire house, total of 3 bedrooms, a kitchen, a living room, and a hallway. We attempted to match the color for touchups, but failed to do so (the house was recently purchased, original paint samples unavailable). My former tenants also left a decent amount of cleaning to be done, ~10 hours worth. I received a formal bid of $3,200 to fix the paint, and then did all the work myself.

All things considered, my tenants received back ~1.6% of their $2,250 security deposit. The charges included A) $110 worth of remaining utilities, B) $835 for cleaning ($235 carpet + $600 for labor), and C) $1,270 for paint damages ($295 for supplies + 30 hours of labor at $32.50/per). Along with their disposition of deposit, I included and referenced Bigger Pockets' Vacating and Cleaning Instructions and Itemized List of Common Deductions (both of which were provided to tenants ahead of time), images of the damages, an invoice for the carpet cleaning, receipts for the paint materials, the page of their signed lease saying they are not to paint without permission, and finally the formal $3,200 bid we received. 

My former tenants were predictably less than enthused, and they are now threatening legal action -- they claim that because I could not provide them with the appropriate color, the paint is not their responsibility. There is obviously nothing in the lease which defines it as my responsibility to provide accurate paint samples upon move out, but they don't see it that way. Naturally. 

I am not sure how to proceed -- aside from this situation, these were quality tenants. They paid rent early, took care of the property, etc. -- they were great at living in the rental, they just weren't great at moving out. As far as the cleaning, I believe we simply have different standards for what qualifies as "move-in ready". As far as the paint, these tenants genuinely spent a lot of time and money *trying* to fix the situation; they just unfortunately made it much, much worse than if they had done nothing at all. 

I am 2nd guessing how much I charged them for the cleaning, and am also considering a small refund on the paint based on remaining materials. At this point, I honestly just want them to go away. Is it worth sending them more money, or is that a slippery slope which will just leave them asking for more? Should I hold strong to my claim that their painting violated the lease agreement, and that I would have been fully justified to hire the work out and send them an invoice? 

Any advice you have would be much appreciated -- thanks BP, you're always there when I need ya! 

https://drive.google.com/file/...

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Rental Property Investor · Cherry Hill, NJ · Member since 2015 · 626 posts · 495 votes
4y

Whoa.  You charged them for every nickel.

First, you need to go to your lease and see what it says.  Then you have to figure out what is normal wear and tear.  

If this goes to court, they are going to look at how long the tenants are going to live there and what is reasonable. 

First, lets go to cleaning.  $835 for cleaning is a ripoff.  I get cleaning of a whole house done for about $200 - $250.  When tenants move out, I don't necessarily charge them for cleaning if they made an attempt to provide the unit in the broom swept condition.  

As for the carpet, you cannot charge them for 100% of the carpet.  The carpet depreciates in value every year.  

Spackling, first, the tenants sealed up the holes.  I personally think that it is unreasonable to charge people to seal up holes from pictures.  Most rolls of the paint cover the holes up.  It is a $10 bucket of spackle and some landlords charge hundreds.  I personally think it is abusive.  

Paint - you can't tell me that you wouldn't repaint the unit for a new renter.  If they just painted a small area over the holes, then you can easily paint over them if you can match the paint.  We are talking about "pinholes" which are mostly sealed up by painting alone.  Are you chagrining them for your labor?  If so, you aren't allowed to do so.  The$3,200 quote seems like the entire unit is getting a fresh coat of paint.  If you can't match the existing paint, how can you expect the tenants to do so?  Looks like you are trying to get a free paint job of the unit if it goes to a judge. 

The only thing I would have taken from them was for the utilities.  Your pictures can't be viewed, but they are irrelevant based on your description.  Remember, turnovers cost money, that is why you want the tenant to stay as long as possible.  

I can tell you that if my tenants left the place in 100% amazing condition, I will still do spot painting if not painting the entire unit, having the place cleaned and the carpets steam cleaned.   Note that I usually paint the unit.  Paint is low cost and easy, but annoying, to do.  A fresh paint smell is similar to that of a new car smell for me - especially when I am showing the unit.

I don't understand why some landlords nickel and dime the tenants that are moving out.  Remember, tenants talk to other tenants, too. 


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  • Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    4y

    @Richard Paul Weisman they’ll go away. A lawsuit threat is classic…

  • Real Estate Professional · Tampa, FL · Member since 2015 · 176 posts · 252 votes
    4y

    Why didn't you know you color swatches and have extra paint on property in the first place? It looks like the original paint job was fairly new.

  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Account Closed:

    I was unaware of the labor situation, I find that...confusing. 

    You just cannot charge for your own personal labor. If you had hired a professional painter, you could have charged them exactly what he charged you, including materials and labor...

     It's to prevent landlords form just making up numbers....

  • Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    4y
    Quote from @Account Closed:

    Here are some paint examples


    Wow, and they think this is an OK way for someone to live when the place is re-rented.

    Who would rent a place that looks like that? No one.

    And why squares, nails make tiny round dot holes.

    I would not have charged them for the nail dot holes, but I would have for this.

    Never let renters perform labor on your rentals, or scheduled "handymen" to do it either--because it's always a crap shoot as to quality.

    It looks like they took tiny holes and made them into huge splotches, and put the unit into a needs paint category before re-rent.

    Their attempt at painting has resulted in more (expensive) damage to the unit.

    It even looks like a different sheen.

    Good Luck!

  • New to Real Estate · Portland, OR · Member since 2020 · 17 posts · 4 votes
    4y

    Lots of responses -- thank you all so much, I'll look to reply to everyone :-)

    @Chris G. Indeed, the tenant was billed for <40% of the quoted "hired help" cost, and all of the "do it myself" labor charges were quoted to the tenant in advance. It's in our lease that they will be billed for a carpet cleaning upon move-out; I could reduce or remove this fee and chalk it up to wear and tear, but they were expecting this charge. Appreciate your response!

    @Jordan Moorhead The tenant emailed earlier today saying they have contacted an attorney, which could of course be a bluff...at this time I have not heard from said attorney -- I suppose we'll just hold off and see what happens, as you advise! Thank you for the reassurance. 

    @Gary L Wallman Definitely appreciate your breakdown on the paint depreciation, that's a great way to do it. I estimate the previous paint was ~2 years old at most, but I have no way of proving that. I intend to reduce the cleaning charges we passed on -- fortunately the tenants in question spared me from the dirty diapers, to their credit. Thank you much!

    @Jeff Copeland Damages + legal fees is very much a consideration, and obviously something we want to avoid. Fortunately I live in WA, which is friendlier to landlords than OR, but your point still stands. Thank you for your feedback and the video link, this was all very helpful!

    @Tim Miller We will definitely make some changes with future tenants, lessons are being learned! All labor costs were clearly quoted prior to move-out, but I lacked the foresight of getting a signed copy. I'm doing my best to document everything, but hindsight is 20-20 -- I've missed some things along the way, we'll do as you suggest moving forward. Thank you! 

    @Bud Gaffney Fingers crossed they do! Appreciate the vote of confidence. 

    @Stephen Dispensa I moved in ~9 months ago, and unfortunately the previous owner was unable to provide paint samples (I asked). We intended to repaint sometime soon, just not right away. The existing paint was still in good condition, prior to the alterations. We have those color swatches now, lesson learned! Appreciate your response. 

    @Bruce Woodruff Are you still unable to charge for personal labor, when it is quoted to the tenant in advance? There seems to be some disagreement on this throughout the forum...I definitely did not make up numbers, I used the "Itemized List of Common Deposit Deductions" that is provided in Brandon and Heather Turner's book "The Book on Managing Rental Properties." Appreciate any clarification you can provide, thanks again!

    @Scott Mac "I would not have charged them for the nail dot holes, but I would have for this...It looks like they put the unit into a needs paint category before re-rent....Their attempt at painting has resulted in more (expensive) damage to the unit." -- 100% my opinion, thank you for contributing!  

    Thank you all again for your time and help, I really appreciate everyone's feedback -- hope everyone's having a nice Thursday! 

  • Contractor · San Diego · Member since 2018 · 34 posts · 32 votes
    4y

    If they sue it will almost certainly be in small claims court.  If the do sue you, then go, and present all this information to the judge.  The Judge will decide.

    Even if you knew the correct color for the touch up paint, the color might not have matched.  Even if you have the original can of the actual paint it may not match after a few months of being on the wall.

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    I don't have time to read it all, but the pictures speak a thousand words. I would have charged them the cost of repainting each one of those walls.

    Key is to document everything with pictures. Keep receipts and invoices. They won't have a leg to stand on in court, which is why they are unlikely to sue.

    The DIY Landlord Book4.7243 Reviews
  • New to Real Estate · Portland, OR · Member since 2020 · 17 posts · 4 votes
    4y

    @Nathan Gesner Thank you sir -- appreciate the follow-up and reassurance provided, definitely makes me feel better. Hope you're off to a good morning!

  • Investor · Cumming, GA · Member since 2015 · 79 posts · 72 votes
    4y

    @Richard Paul Weisman

    I doubt they will sue. My opinion is you took advantage of the situation to a maximum degree. I would likely rule against you if I were a judge.

    Looks to me as if 40-50 percent of your peers here agree with me...

    If it were me, I'd follow with something that does not admit anything but perhaps smooths the water.

    I'm sorry we disagree on this but I will concede some dollar figure as a gesture of good faith. In accepting this money, we agree this matter is closed.

    .. when people move out, its always expensive. Nobody ever leaves it move in ready.. unless you plan on getting a tenant with lower standards next go around..

    If you live in the town you have rentals in, you don't really want folks walking around angry with you. The world doesn't seem to be getting calmer...

    I generally will take the short end of the stick. Lose the battle and win the war. Live in peace. Rehab again, raise rent, learn lessons and repeat.

    Good luck!

  • New to Real Estate · Portland, OR · Member since 2020 · 17 posts · 4 votes
    4y

    @Tom T. Appreciate your response! No apologies needed, we do not disagree. I am doing pretty much exactly as you suggest -- sending a follow-up letter/payment which admits no fault, but will hopefully smooth things over. I truly was not looking to take advantage of the situation, for whatever that's worth; if I was, I would have hired the paint out professionally and sent my former tenant's an invoice. A lot of work went into making sure that was unnecessary, but I understand why people view it otherwise. Thank you again for your time! 

  • Contractor · Portland OR · Member since 2021 · 39 posts · 24 votes
    4y

    In response to the paint.  This is more of a handyman comment/tip for the do it yourself landlords. 

    No matching is ever going to be perfect, period.  But the matching ideas other presented here are pretty good for samples. The one thing I noticed in the pictures for paint touchups is it doesn't apprear that folks are feathering in their touchups. Feathering will do a lot to blend your matched paint in to the rest of the wall so you don't have these stark lines where the new paint meets the old.  A quick visit to youtube will show you how to do it if you are doing touchups yourself.

    Also sometimes more is better than less in painting and drywall patching, if you have a cluster of small patches, just paint or patch one larger seciton that contains it all so that you are feathering/blending at top and bottom, but the middle where folks eyes naturally land is one large similar landscape.  They are less likely to notice the inconsistencies, as they don't stand out so much. 

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