What To Do When Security Deposit Falls Short?
One of my tenants just moved out this weekend. The problem is that the place is a wreck - carpets are filthy, floor is swelling in one place due to a leaky aquarium,10 broken tiles in the kitchen, one toilet not working, dirt an inch thick on the base boards, etc. The problem is that the tenants security deposit falls way short of what the repairs will cost me to rehab the unit. What do I do now? I already took tons of pictures in case I have to take the tenant to court - is that the proper remedy? I estimate the repairs will cost around $3,200 (if I do the work myself) and the security deposit was $1800. Thanks for the help
with the legal cost........you are better off eating the difference. they can file b/k. remember they are renters. i once was going to sue in same sitation. my atty. told me he would charge more than the difference. he sent a letter of intent. the reply was they would b/k. the courts like to see repairs done by "jobbers" with reciepts not owners doing the work. its not impossible to win, its a uphill battle but every time i have been there i would only gain personel satisfaction not $$.....km
Thanks for the post - so how do you combat this? Bigger security deposit? If I am going to lose $1400 (plus my time) every time a tenant moves out, why should I bother? Should I be looking at units in "better" areas to try and attract tenants who take pride in where they live, or does this really occur at any income level with renters?
get an estimate of repair & go after a judgement in small claims court ...then hand it over to a blood sucking bill collector...they will at least make their life miserable for a while...maybe they will think twice about doing that again...best case scenario - you may get 1/2 back...CWal
If you have before and after pics and the entry checklist the tenant signed (I hope you have one) and do an exit one yourself then small claims is a slam dunk.
Unfortunately, I dont have a walk through signed by anyone - I bought the building about a year ago, and the seller was not very forthcoming with info.
you can get estimates from jobbers and by pass the attny. if you know the process. its a pain to go from start to finish. it depends on your resolve and time you want to put into it. if you get judgement you will probaly have to pursue them with garnishment and lookout for b'/k. it can be done but i learned to screen better but you can still get burned. its part of the trade. its one reason some don't stick with it.......km
p.s. it put me into l/o's the lazy mans rental. lol........goog luck.......km
Hey,
Having a good pre and post inspection checklist (with photos) is a good start, but only helps you in court.
What you really want to do is a quarterly written inspection. This way you catch any problems before they get out of hand.
bruce is right the best is reg. inspection. i inspect once a month on rentals. as bruce indicated you can forsee problems.......km
If you 'adopt' a tenant you must make a greater presence/inspections.
If you bought this place you will have a harder time proving some of those damages == prior conditions?
If tenants have been there for years and there is no carpet specifics in the lease, that is normal wear and tear.
I would not waste 1 sec. trying to get more money in this situaltion, in fact good luck justifying the 1800. from what I see.
You can't charge for your labor.
To make this post a bit clearer...
There are 4 or more aspects to this thread.
1. What to do when buying with an existing tenant (discount on price, inspections)
2. How to minimize the amount of damage a tenant can do between when they move in and when they leave (inspections).
3. Best strategy for collecting when you are left short (small claims court).
4. Strategies to get the tenant to act more like an owner and less like a tenant (L/O and contract sales).
I just wanted to make it clear that some of the solutions to any of the above depend a lot on what happened before. If you make mistakes on the way in they can get worse. If you had inspected the place before taking ownership, once every three months, etc. then there would be little in costs that was not protected by the deposit.
At this point, put the extra costs into the educational line item in the budget and do better moving forward.
John
[addsig]
Thank you, John, for clarifying.
Did not mean to seem critical, Joe. I was just rushing through with what I think I see in your case. I carefully pick my battles. Worth it cuz I can focus on moving on = gaining.