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Dear Patty - Security Deposit Disputes

Wednesday, August 3, 2011  
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Dear Patty the Property Manager,

I know all tenants hate to receive a claim letter, but sometimes they leave us no choice. What can I do to minimize a security deposit dispute with a tenant?

--Conflict Avoider

Dear Conflict Avoider,

We all hate security deposit disputes. Some of what you can do is very obvious, such as checking out tenants thoroughly before you rent to them. But even when you do all the due diligence, sometimes you end up having to charge for carpet cleaning, housecleaning, etc.

First, make sure at move-in that you do a thorough job of documenting the condition of the property at the time the tenant takes possession. I am a fan of videotaping the entire property, inside and out, with the tenant present. Videotaping should always be done with the utilities on so that you have a record of the burners on the range working, the toilets flushing, etc. Have the tenant help you by opening blinds, windows, etc. Record the condition of the flooring, the walls, fronts and backs of doors, the inside of the fridge (are the shelves all there? are the door brackets all there?), etc. Open the oven. Is it clean? Are the smoke detectors working? How does the bottom of the cabinet under the kitchen sink look? Is the dishwasher working? Run it through the cycle while you complete the inspection. A thorough move-in videotape will go a long way toward minimizing tenant security deposit disputes… especially if you do it with the tenants present because they will know that you have a record of the condition of the property.

There are some actions you can take once you get notice from the tenants that they are moving:

  • Send a letter acknowledging that they are vacating and the date they are vacating. Remind them of what you expect at the time of move out. If the lease calls for the carpets to be professionally cleaned, remind them of that. I send a handy "clean house” check-off list to tenants; if you don’t already have such a list, consider creating one.
  • Do the move-out inspection only after the tenants have completely vacated the home and turned in their keys. To eliminate face-to-face disagreements, never do these inspections with a tenant present.
  • Take a camera with you to the move-out inspection. If you find anything that should be charged to the tenant’s security deposit, take a picture of it for documentation.
  • Get estimates from your vendors for the cost to bring the property back to acceptable condition. Make sure that your charges are reasonable — tenants can become angry when they feel they are being overcharged. If the carpet was already 10 years old, don’t expect to be able to claim the full cost of carpet replacement if they damaged the carpet. If the tenants lived there for only five years, don’t expect to be able to charge them for full interior paint.
  • Send the certified claim letter to the tenants’ last known address and make sure you include pictures that support all charges to the security deposit.

I have rarely had a claim letter disputed even since I started to mail pictures of damages along with the letter. After all, if you say the house was dirty and you send the tenants a picture of disgusting toilets and floors, how can they dispute it?

Sincerely,

Patty

"Patty the Property Manager" appears courtesy of the ORRA Property Management Subcommittee. Readers are invited to submit property management related questions to Patty by sending an e-mail to education@orlrealtor.com.


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