​How To Handle a Security Deposit Like a Professional Property Manager

How To Handle a Security Deposit Like a Professional Property Manager

As an individual landlord without a professional property manager, you might be more inclined to cut corners here and there. While this might be tempting, we can assure you that every extra step you take to cover your finances and legal rights is a step in the best direction. In this article, we’re going to give you tips for handling security deposits on Georgia properties like a professional property manager.

First of all, there are no limits on the amount of money that can be requested as a security deposit. Generally, one month of rent is required. However, security deposits can also be used to collect funds for pets on the contract. If you aren’t sure about where to set your security deposit amount, you should check with your local government to see if there are any laws that you aren’t aware of. Some places might impose restrictions on security deposits. As we mentioned earlier, there aren’t generally restrictions, but a simple phone call will provide you with the peace of mind in knowing you’re within your legal rights.

Before and after you receive your tenant’s security deposit, you are required to submit written notice per Georgia law.

When you receive a security deposit from a tenant, Georgia law requires that you place it into an escrow account. You will need to let your tenant know about the account. You also have another option for stowing away your tenant’s security deposit – surety bonds. The bond must be posted in the county where the property is located, and the amount can’t exceed $50,000. Before you accept a renter’s security deposit, you must provide him or her with a list of previous damages to the rental property. However, if you own 10 or fewer rental properties, you are exempt from this regulation.

When the tenant moves out of the rental property, you are required by Georgia law to return the security deposit within one month. As the landlord, if you don’t abide by these regulations, you could forfeit your right to keep any portion of the security deposit.

In Georgia, there are several reasons why you could keep a tenant’s security deposit:

• the rent wasn’t paid
• there were unpaid pet fees
• there was damage outside of normal wear and tear
• the tenant had unpaid bills for repair or cleaning with third parties
• the utilities weren’t paid

These are just a few of the reasons why you might consider keeping a portion of a security deposit. To handle this professionally, you’ll need to carefully document your calculations. Provide this itemized list to your tenant, and make sure to keep a copy of the list for yourself.

In Georgia, you have 7 days to inspect the property after the tenant terminates his or her occupancy. You are required to list each and every damage, along with the cost to fix these problems. During this time, the tenant also has the right to inspect against your list. Make sure to define which problems are outside of normal wear and tear, even supporting your facts with photos if necessary.

Within one month of the lease’s termination, you are required to return the remainder of the security deposit.

Handling security deposits like a professional property manager means carefully adhering to these rules. Make sure to document all of your claims carefully to protect yourself, and keep an open line of communication with your tenant to ensure that all aspects of receiving and disbursing the security deposit are taken care of.

Marina Shlomov, a managing partner at ALH|Podland Rental Homes Property Management is the author of many articles on Landlording, Atlanta Property Management, and Real Estate Investing. A residential builder in the state of Georgia since 1999, Marina is an investor herself. Her property management company is intended “For Investors” and “By Investors” for a simple reason – she knows what investors’ goals are and she works hard to reach their goals. In her spare time, Marina likes to spend time with her family, friends, garden, read and travel. Check her out at www.alhpodland.com in the About Us/Meet the Team section.

You can find Marina’s articles and comments at @rentalhomesatl on Twitter, on Facebook, Google+, Blogger. and YouTube.