HOW IS THE SECURITY DEPOSIT HANDLED WHEN THE TENANT VACATES?

****Please be aware****  A list of charges against the security deposit must be sent to the vacated tenant no later than 30 calendar days after they return possession of the property.  Should you fail to get the list of charges sent via certified mail return receipt by the deadline, you loose the right to make claims against the security deposit and must return the security deposit in full to the vacated tenant.  You do have the option to sue the tenant in a court action; you just can’t claim the security deposit.  This means that time if of the essence.

When a tenant vacates a property, a move out inspection should be done in order to determine if there are any charges that should be claimed against the security deposit.

During the inspection, lots of photos showing the condition, good or bad, should be taken.  I tell my property managers that once the inspection is completed they should sit down, look at their notes and photos, and they then make three columns:  Tenant, Owner, Research

Tenant – all charges that would be tenant’s responsibility.  Some examples would be; cleanliness, stains on the carpet, removal of trash, removal of personal items, crayon markings.

Owner – all items the owner would be responsible for including normal wear and tear items.  Some examples would be; repaint interior if the tenant was in the property for several years, repair popcorn ceiling that is peeling, kitchen cabinets are deteriorating due to age.

Research – any items that should be compared to the condition before the tenant moved in and all notes during tenancy.  Some examples would be; torn screens.  Florida requires owners to maintain all screens annually. If this was not done then this would be considered an owner expense.  Accent wall in the living room:  was that there when the tenant moved in or done during occupancy?  If it was done by the tenant, was there permission and if so, was it suppose to be returned to the original color before the tenant vacated?

Once you have determined which repair items are specifically the tenant’s, you then want to determine if depreciation is a factor.  An example of this:  The tan carpet did not have the red stain when the tenant moved in.  It won’t clean out and it’s in the middle of the floor where furniture won’t hide it.  According to the carpet vendor replacement of that room carpet is the only option left as there is no way to dye the stain and match the carpet color.  Let’s say the carpet has a seven-year life span but is only two years old.  You will have to depreciate the two years from the remaining life span in order to determine the dollar amount to charge against the security deposit.  Example:  2 years ago you paid $500 for new carpet in that room.    $500 / 7 years (life span) = $71.43 carpet cost per year

$71.43  X  2 years = $142.86   (depreciated value)         $500 - $142.86  =  $357.14  (depreciable life span remaining)

You can claim against the security deposit $357.14 to replace the carpet in that room even if it costs $600 now to replace it.

This sounds difficult and complicated, but it is a way judges make sure owners are not getting brand new flooring throughout the property that is paid by the tenant, when there was only one spot in one room on 10-year-old carpet that was damaged.

You want to make sure to get written estimates from vendors for the needed repairs.  If you don’t do the work, you can’t charge for it {Even if the charge is a legitimate tenant responsibility item}.  If you elect to DIY, then you can only charge for supplies and not labor as you are not a licensed vendor performing the work.

Now you have all your estimates for the needed repairs, you need to get a list of the repairs and charges sent to the tenant via certified mail return receipt.  This needs to be sent BEFORE the 30th day of the tenant returning possession of the property.  When you prepare the claim list, you are required to include the following verbiage:

 This is a notice of my intention to impose a claim for damages in the amount of _____ upon your security deposit, due to _____. It is sent to you as required by s. 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to (landlord's address) .

You can then list the repairs individually with each cost.

The claim letter is to be sent to the last known address.  If you didn’t get the tenant’s new address then it is sent to the rental property address.   When the claim letter is mailed, you sit back and wait.  The final disbursement of the security deposit could take 30 – 45 days of longer.

Once the tenant receives the claim letter, they have 15 days to respond to you should they not agree with any of the charges.

If you do not hear back from the tenant, you can disperse the security deposit per your claim letter.

If the letter is returned to you by the post office, the best thing is to wait 15 days from the date you receive it back before dispersing the security deposit.  Sometimes the tenant will call saying they haven’t gotten anything about their security deposit.

If the tenant does respond that they do not agree with some of the charges, you want to address the dispute and try to come to an agreement about the charges.

Some examples of how to resolve this would be:  giving the tenant copies of the estimates/invoices and a copy of the lease agreement highlighting the section that addresses the reason for the charge, reduce a charge, or even completely eliminate a charge.  Another way to resolve it might be to settle for only what is holding in the security deposit and calling it even. (When the charges exceed the security deposit amount)

You may be asking why would I reduce or remove charges if the tenant failed their responsibilities and were charged fairly?

Only in Landlord Tenant security deposit cases in Florida are the winner automatically awarded court and attorney fees.  Even $1 awarded back to the tenant is a win for the tenant which means they are also awarded court and attorney fees.  There have been attorneys awarded thousands and thousands of dollars in fees over security deposit disputes.  You don’t want to be one of those cases that property managers are trained to not become.

When you and the tenant come to an agreement on the claim, make sure to get it in writing with their signature.

Remember to always ask for guidance by your Florida Real Estate attorney, as this article is based on our company procedures and there is always more than 1 right answer.

If you have read this and decided you do not want to have to handle the security deposit, give us a call!  We always welcome tenant-occupied owners.

321-506-1009

info@anchorrepm.com