The “S” Word
Today I wanted to talk a little bit about the “S” word…I know what word comes to mind for you…SECURITY DEPOSITS, right? Yeah…me too! 😉
One of the most difficult INSANITY INDUCING tasks a property manager / property owner faces is the refunding of the security deposit after the tenant has moved out. It is very difficult to make everyone happy and do the fair thing to all concerned. It is a precarious balancing act, to say the least. As an owner, you are the bad guy unless you refund 100%–even if there is far more damage found after the fact (which does happen often, unfortunately.)
Any property manager (or owner) is over the moon happy when they can issue a full refund– because the tenant has fulfilled their lease and left the property in excellent condition (meaning all you have to do is stick your sign back in the yard!) Win-win!
Unfortunately, this is not always the case. Often, deductions must be made for loss of rent or damages to the unit, much to the dissatisfaction of the departed tenant.
However, some things can be done to make for a “smooth” transaction overall, and hopefully dispel some of the hard feelings (or get rid of them all together, even better!)
Step 1 – START BEFORE MOVE IN DAY! This may sound weird, but listen up! 😉
Make sure the unit is in excellent condition on the day of move in. It is very difficult to charge against a tenant’s deposit for painting if the walls were already scuffed at move in. Exactly how you expect the tenant to leave the apartment at move out, it should be that stage or better on move in day!! You are setting the tone of your expectations NOW, so set them high!
Document the property condition before tenant moves in. Inventory & Condition forms, photos, videos–you can’t have too much documentation, in the event that the deposit refund is contested in court.
We conduct a thorough tenant screening. Starting with the right tenant in the beginning eliminates most problems regarding a security deposit refund at the end of the tenancy. A good tenant will care for the property while renting, complete all required payments, and leave the residence in good condition. Good tenants want to maintain a good rental history and credit; in addition, they want their security deposit back. Don’t get in a rush to rent–IT IS WORTH IT TO WAIT FOR THE RIGHT ONE!! A MONTH OF VACANCY IS FAR CHEAPER THAN A TRASHED UNIT!
Step 2 – STAY UP TO DATE DURING TENANCY- This can avoid legal issues where the tenant feels they have the right to use the security deposit for rent or repairs while they are still renting.
Complete necessary repairs in a timely manner.
Maintain accurate maintenance records.
Keep accurate financial records on rent, late fees, and any other funds collected from the tenant.
Step 3 – REFUND THE DEPOSITS ASAP- It is important to remember that settling the security deposit in a timely manner will be to the benefit of all parties, and it’s the law. In Texas, you have 30 days from the date of move out to get the security deposit refunded/accounted for.
Steps to the refund/accounting:
- The property condition is properly documented and completed.
- A refund and/or statement of condition detailing the deductions is issued in accordance with state laws.
- If circumstances dictate that the security deposit has been forfeited, we itemize repairs and details of all unpaid monies and issue a statement to the tenant at the last known address. This needs to be completed even if the tenant owes the property owner money. Failure to issue a security deposit statement and/or fund within the timeline of state law can lead to larger financial loss.
Hopefully all your tenants get a 100% refund–I LOVE LOVE LOVE LOVE writing 100% refund checks–it is the best thing for my owners, the tenant and also myself! That means that the next day I can have a new tenant move in and no angry phone calls from ex-tenants! And no punching!! (Disclaimer: I’m only kidding…I’ve never been punched by or punched a tenant…knock on wood!) WIN-WIN-WIN!
May your rents be high & your deposits 100% refunded~ Until next time! -Lisa
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If you are looking for a Palestine Property Manager, or you have some property management related questions–feel free to give me a buzz at 903-948-3343
Lisa E. Priest is a Palestine, Texas Real estate agent & experienced property manager with over 12 years experience in single & multifamily property management. She has seen it all–the good, the bad and the oh-so-ugly! Email Lisa at: [email protected]
Lisa Priest, Texas REALTOR® with Picket Fence Realty, Inc.
voice / text: 903-948-3343
http://www.RentPalestine.com – http://www.BuyPalestine.com
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