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How To Avoid Security Deposit Disputes

How to Avoid Security Deposit Disputes

Property management can be a lucrative business, but if not handled properly, deposit disputes can be an arduous, ongoing pain. A great way to avoid security deposit disputes from the start is to have a really good pre-move out inspection. By law, we are required to offer it but the tenant is not required to take it. Our recommendation is to do it because it will help you avoid bigger issues down the road. You can talk about any damages or repairs up front and the tenant will know what to expect. This will eliminate any surprises when the security deposit is charged. This inspection is your first line of defense, so push to get it done.

Be Fair

It’s very important to adopt clear policies on how you will handle items across the board. Normal wear and tear items such as paint and carpeting will really be subject to personal considerations on what is normal wear and what is not. Therefore, we give a five-year shelf life to all paint and flooring. With this general rule in place, we avoid any claims we are being unfair to our tenants or our property owners. It is an across the board policy that any paint and floors in our properties will last for five years and the value will decrease by a set amount year after year.

Be Flexable

If a tenant is reasonable and you feel they make a good case for why they should not have to pay for something, a good policy is to just split the cost with them. At the end of the day, it will be much cheaper to go this route than it will be to get involved in a long, drawn out court battle. Court will cost you more money whether you win or lose.

Be Reasonable

It’s also sometimes appropriate to ask your tenants if they want to do the repair work themselves. If you have conducted a move out inspection and you think there are simple items the tenants can come back and fix themselves, that may be an option for you. You can supervise if necessary. This is not a reasonable option for every tenant, but if you have something that can be reasonably fixed, it might be better for the tenant to handle it at a low cost than to have a more expensive repair person or maintenance worker do it.

 

Offer a reminder on common areas of security deposit reductions. Your tenants don’t think about this every day like we do, so you might need to tell them to shampoo the carpets or change the air filters before they move out. Remember to document everything. Do a very thorough move in inspection with photos so you can have a detailed report on how the home was received by these tenants. Time and date stamp those photos. If there is a dispute, you have the evidence you need to support your side, or even to support the tenant’s claim, if it turns out they are correct.

 

If you have any questions about security deposits or the process of avoiding disputes, please contact us.

 

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