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What to know about security deposit disputes

On Behalf of | Jan 31, 2023 | Real Estate Law |

The security deposit is the money you take from your tenant to protect yourself if the tenant breaks any lease terms. You can use the deposit to pay for damages, cleaning, key replacement or to pay for unpaid rent.

It is vital to understand security deposits before renting to a tenant.

How to avoid security deposit disputes

Security deposit disputes are common. You must understand how you can use the security deposit to avoid them. For example, you cannot charge your tenants for reasonable wear and tear, like carpets, curtains or painting. You can only charge for those items under the condition that the damage went beyond reasonable wear and tear. You also cannot use the security deposit for any damages that occurred before the tenant moved in.

Once your tenant moves out, you have 21 days to provide the tenant with the security deposit or with the list of charges for the property. If you do not contact the tenant within 21 days, the tenant can file a lawsuit against you.

How to return a security deposit

To return the deposit to you have two options. You can mail it to the tenant or you can hand it to the tenant directly. With the deposit, you must include a letter explaining why you kept part or all of the deposit and include an itemized list of all deductions. Include copies of receipts and charges unless the charges did not amount to $126. If there are repairs that you cannot finish within 21 days, you can send an estimate of the repairs first. You have 14 days following the repairs to send receipts.

Maintain records of the property’s condition and receipts from repairs to protect yourself against disputes.