Security deposits are extremely important when we’re talking about landlord and tenant relations, and that’s because this is the issue that’s most likely to land you in small claims court. Let’s talk about how to avoid that.
Rules Around Security Deposit Returns
Here are the rules you need to follow when returning a security deposit to your departing tenants:
- You have 21 days to get that security deposit back to the tenant. It has to be postmarked by the 21st day.
- You need to send the deposit to the tenant’s last known address. You don’t necessarily have to know where they’ve moved, but hopefully, they’ve provided an address. If you don’t have one, send it to the address you do have, and if it comes back to you, hold onto that envelope.
- Offer tenants a pre-move-out inspection. You don’t have to have one by law, but the law does require that you offer one.
- Maintain good accounting. You can’t just keep the entire deposit because the house is trashed. Account for every penny you keep out of that deposit.
Reasons You Can Take Deductions from the Deposit
What can you deduct for?
- Rent. If rent has remained unpaid, you can use the security deposit to cover the balance. You cannot take out rent for the time you spend turning the property over, but if you think you have a strong case for some reason, consult an attorney.
- Cleaning. The civil code says you can charge the deposit for cleaning that’s necessary to return the property to the level of cleanliness it was when a tenant moved in.
- Personal property. This is an important one. You can charge for any storage or hauling of personal property that’s left behind by a tenant. The rules here are specific, especially if we’re talking about property of a certain value, so go ahead and charge the deposit, but talk to an attorney if there’s a case that could be brought against you.
- Property damage. This is where most owners get into trouble. You can charge for damages to your property that are beyond ordinary wear and tear. The law is not very specific on what constitutes ordinary wear and tear, so make sure you’re accounting for the wear and tear that’s expected. A tenant who has been there for 10 years will have a lot of wear and tear whereas a tenant who has been there for six months will not.
How to Avoid Trouble: Security Deposit Best Practices
Here’s how you can keep yourself out of trouble (and out of court) when we’re talking about security deposits:
- Take a lot of move-in and move-out photos and videos to document the condition of your property. This allows you to be very clear on the property’s condition before a tenant moves in and after they move out.
- Have written expectations on the condition of the property. You can email those expectations to your tenant so there’s no doubt about what you expect.
- Encourage the pre-move-out inspection. This is something you have to offer, and you really want your tenants to accept it. It will help both you and your resident. The resident is more likely to get their deposit back, and you have less chance of dealing with a dispute.
- Hold your invoices. The invoices you use, when you’re having maintenance to get the property back into shape, are important to keep, but so are the invoices that you incurred before the tenant moved in. That might include professional cleaning invoices or receipts for new carpets or flooring. Hold onto those for as long as you can.
The goal of effective security deposit returns is to avoid going to court. If you have any questions about security deposits or property management in Solano County, please reach out to us at Krystle Properties.
