One of the most common landlord and tenant disputes comes at the end of the relationship, when tenants move out and want their security or damage deposit returned. While laws differ by state, in most locales you cannot withhold funds to repair normal wear and tear, but you can withhold funds to repair damage. In general, you can only retain enough money to restore the apartment's original condition, not to upgrade finishes.
Normal Wear and Tear
The term "normal wear and tear" refers to changes in the property's conditions that would be expected in the ordinary course of daily living. Most states have not legislated the items that fall into this category; it would be impossible to do so because of the wide variety in property inclusions and initial conditions. You can include some definitions in your lease terms, but the legal document may limit you later. If damage occurs, one you didn't think to include in the lease, it cannot automatically be factored into the end tabulations. In general, wear and tear must be assessed on an individual basis in every apartment.
Examples of normal wear and tear include:
If the tenant painted the apartment or put up wallpaper, you can use security deposit funds to restore the original color, even if the new paint or paper is in good condition.
Examples of damage include:
Generally, landlords are expected to clean apartments in preparation for new tenants; most leases call for existing tenants to leave the property "broom clean." If the tenants leave the apartment extremely dirty, you can use their deposit to pay to have it cleaned. If tenants leave property behind, you can use their deposit to cover the expenses of removing those items.
Avoid Disputes by Keeping Tenants Informed
The best way to avoid disputes is by having the tenant agree with you before any charges are deducted. Perform a move-in walkthrough with the tenant when the lease begins, noting any existing defects in the apartment. Taking photos can help document conditions. Obtain the tenant's signature to indicate his or her agreement with the assessment of the condition. You cannot charge the tenant to repair the existing, original defects.
When the tenant leaves, perform a move-out walkthrough using the same checklist. Any new damage should be noted, and the tenant should sign to indicate agreement. The form your tenants sign should state that they would be charged to correct those damages. Use photos to document the move-out condition.
You should also provide the tenant with an itemized list of the repairs required and the cost of each repair. These amounts must accurately reflect the charges from the repair service, and you should provide the tenants with copies of the receipts.
Tenants who are unhappy with receiving only a partial refund of their deposit may pursue a case in small claims court, but if you've documented the condition of the apartment and the expenses incurred, you are likely to prevail.
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