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Tip #125: Earmarks

tenant disputeIt’s astonishing how many times tenants take landlords to court over security deposit deductions.

Court cases are expensive, and many states provide for penalties if the landlord wrongfully withholds deposit funds.

So if you don’t want to become a statistic, take heed:

Deductions can only be taken for damage caused by the tenant, not age or normal wear. Sounds simple, right? But in practice, it can be difficult to discern the two.

A deduction can never by applied to upgrades — like a carpet replacement at the cost of one individual tenant, unless that tenant alone destroyed the carpet.

Be careful when charging different security deposit amounts to different tenants — that can give rise to a claim of discrimination.

Provide a detailed accounting as required by law, but be aware of the “nickel and dime” scenario. A fifty dollar deduction may not seem like a big deal, but fifty one-dollar items makes for a long list, which can incite anger — and a possible lawsuit.

Stave off problems by providing a cleaning and maintenance checklist prior to the move out. Offer to stop by and perform a “pre-move out” inspection while the tenant still has time to fix any mishaps.

See last week’s Landlord Quick Tip. American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, including rental forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.

  • Bill

    1) video tape when tenant moves in to record condition.
    2) Physically inspect, using a checklist with tenant at move in
    3) when you get move out notice, send a letter to tenant detailing expectations, as defined in your lease, and offer to inspect with tenant at the end of lease, after they have moved out. Always suggest that they move out a few days early, so they have time for the inspection and time to fix any problems.
    4) be sure the lease sets out the fees and charges for cleaning, renovation, that the tenant will pay to remediate damage.
    4) videotape when they move out, to record condition
    5) record damage on the same move in checklist/inspection report

    with these in place, tenant will have a hard time disputing your charges.

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