How to Disperse a Tenant's Security Deposit

When a tenant vacates the property, return his security deposit. Typically, this amount depends upon the condition of the premises and any costs incurred to repair them. Disperse a tenant’s security deposit with care to prevent trouble later.

Instructions

Difficulty: Moderate

1. Inspect the premises, with the tenant if possible, prior to returning any fees. Bring along the rental inspection form you used when he moved in for comparison. A good idea is to take photos, or a video, of the unit when the tenant moves in and compare them to the condition at the end of the lease.
2. Hold the security deposit for up to 30 days to allow for repair estimates. Get at least two estimates for repairing any damage caused by the tenant and use the lower one unless there is a legitimate reason. Disperse the balance of the security deposit to the tenant.
3. Subtract any rent due from the amount returned to the tenant. Some tenants, aware that they have a deposit on file, will not pay their last month’s rent. You can deduct the amount from their deposit, in addition to any damage charges.
4. Disregard normal wear and tear when assessing damage charges. The law expects renters to live comfortably in an apartment and you may not charge them for reasonable wear to carpets or other areas. A child’s smudgy handprints on the wall are not damage, they are normal.
5. Pay interest, in addition to returning their deposit, if you kept their money in an interest-bearing trust account while they lived in the unit.

Tips & Warnings

• Make sure you can justify any amount you withhold from a tenant’s security deposit. The damage must be real and not just normal wear and tear.