How to Calculate a Security Deposit Refund
When your tenant moves out, he or she will probably want a security deposit refund. However, if you notice that there is a bit more wear and tear on the unit than is normal, you can deduct the cost of the repairs from the security deposit. You can also deduct back rent or late fees from the security deposit. Some states require you to hold the security deposit in an interest-bearing account. Make sure to include any owed interest if this is a requirement in your state.
Other People Are Reading
Instructions
-
-
1
Look for obvious signs of damage. If there are holes in the walls and/or significant damage to the flooring, you can charge your tenant for this damage. The amount you can charge should not exceed the reasonable cost of repairing or replacing the items. Other obvious problems include broken fixtures, broken windows and damaged doors and locks.
-
2
Check for hidden problems. Check all of the appliances to see if they are in good working order. Check the unit after all the furniture has been removed for hidden damage such as burned carpets or writing on the walls. Deduct a reasonable amount to repair or replace these items.
-
-
3
Be fair. Only charge for what is broken because of the tenant's neglect. Normal wear and tear is permissible. If a carpet shows wear and is seven years old, you should not charge the tenant for it. If a 10-year-old refrigerator is sputtering, don't charge the tenant to replace it.
-
4
Give the tenant every cent he or she is due. If the damages calculate to be $999 and the security deposit was $1,000, return the remaining dollar to the tenant. If the damages exceed the security deposit or the tenant owes you more past-due rent, send a statement and go to court (if necessary) to enforce payment of the charges.
-
1
Tips & Warnings
You may also charge for cleaning the unit and hauling away garbage and items that were left behind.
Document all damages and repairs in case the tenant tries to sue you for the return of the deposit.
References
More Like This
Comments
-
Andrea Hermitt
Dec 19, 2007
True... that is the law if the Landlord owns a certain number of properties, or a certain number of units on one property. For the average landlord with 2 or three houses, it should not be a concern, but check your states laws first. -
K Mueller Stroup
Dec 19, 2007
The only thing I would have added is that in at least some states, the Landlord is responsible for paying interest on a security deposit that exceeds the amont of the monthly rent (probably not if it is additional due to pets, etc).
