Raiding Deposit Raises Legal Issue
Rent it Right
by Janet Portman, Inman News
Q: When my tenant moved out, he left rugs that were badly stained.
Although I could have had them cleaned professionally, I decided after my tenant left to pull them up and refinish the hardwood floor beneath. In fact, I gave the unit an overall facelift, so that I can charge more rent, and I would have taken the rugs up even if they had been left in a clean condition.
My tenant doesn’t dispute that the rugs were dirty, but says that because I didn’t actually clean them, I shouldn’t be allowed to deduct from his deposit an expense I never incurred. Who’s right? –Mary M.
A: Yours is a question that would warm the hearts of law professors everywhere. Like many issues in the law, there’s no simple, applies-everywhere answer. But here are the basics.
We would first need to take a look at your state’s security deposit statute. Some statutes simply tell landlords that they can use the deposit only for unpaid rent and damage beyond normal wear and tear. Some go further, and specify that landlords who make deductions for necessary cleaning and repair must send tenants the receipts for these expenses.
If your law is like the second type, you won’t be able to deduct for cleaning you never had done because you won’t have a bill from the carpet cleaners to show the tenant.
Now, let’s suppose your law is not so detailed, and simply tells you what you may use the deposit for. You could advance a pretty strong argument that the deposit is intended to compensate you when there’s damage beyond normal wear and tear, and that you are under no obligation to actually accomplish the repair. In a sense, if you don’t repair the property, its value will go down, and the rent you can expect to get from this now-deteriorated rental will also fall. Arguably, you’ll be “using” the money you kept from the deposit to pay yourself for the diminished value of the unit and make up for the lower rent you can expect to receive. The choice — to repair, or use the deduction to make up for diminished value — should be up to you.
Your tenant, of course, won’t buy this theory. And to be sure, it just doesn’t seem fair to deduct for professional cleaning when you candidly admit that your decision to refurbish required tearing up the rugs even had they been returned spotless.
But I don’t think the tenant will find too much support in the law. To prevail, he’d have to convince a judge that somehow he’d been wronged by you. But you did nothing wrong — you simply decided to use the money you were entitled to in a different way. People do this all the time — many car owners involved in accidents, for example, receive compensation from insurance companies that’s intended to cover the cost of repairs, yet the owners often decide to live with the dents and pocket the money instead.
Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide”. She can be reached at [email protected].
Copyright 2009 Janet Portman
See Janet Portman’s feature, The 411 on Late Fees.
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