Posted May 29th, 2012 No Comments
Tenants and landlords will agree: At the end of a lease term, the ideal situation is to have a spotless property with zero damage. This way, the landlord can make a quick turn-around between tenants, and tenants can leave with assurance they will receive their security deposit back in full. However, in order to turn a hypothetical into reality, landlords and tenants must work together before the tenant even moves in to set clear guidelines for what constitutes a full refund. Be sure to discuss the following points with your tenant (or landlord) before move-in to insure both parties agree what constitutes a full refund of the security deposit.
Define Common Wear and Tear
Before the tenant moves in to the rental property, it’s a good idea to define what “normal wear and tear” actually means. Common wear and tear, like fingerprints on a wall or minor scratches on a wooden floor, should not come out of the security deposit since minor damages are covered by monthly rent payments. Damage beyond normal wear and tear which would constitute a need to fix or replace include heavy stains on the carpet or broken window screens.
Document the Property Condition before Move-In
Before move-in, both landlords and tenants should take pictures, videos or jot down notes to document wear, tear, and damage to the property to insure both parties are in agreement of the property’s condition. Landlords should also be sure to note any existing flaws in the Inspection Checklist to be included as a part of the property’s lease documents. Both the landlord and the tenant should keep signed and dated duplicate records of the property condition for reference upon move out. For extra measure, execute this document electronically using e-Signatures to guarantee that the property condition in the document cannot be changed later.
Know Security Deposit Laws for Your State
Unbeknownst to many a tenant, landlords are not required to return the security deposit immediately following move-out. As a landlord, be sure to both know the limits of when and how the security deposit should be returned, and properly communicate this to your tenants. It is always a good idea for landlords not to return the security deposit right away so they have some time to explore any damage not visible at first glance. Some states or cities may also require landlords to pay interest on the security deposits. You can learn more about security deposit laws for your state at LeaseRunner website.
Receipts and Estimates for Repairs
If the landlord has to deduct some amount from the security deposit, it is the best practice to provide the tenant with itemized receipts and estimates for repairs. If tenants would rather name their own price, give them the option to repair the broken items themselves.
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