Landlords are an essential part of our economy, and over 10 million Americans earn a rental income every year.
When a tenancy comes to an end, it is essential as a landlord to know when you may have a claim on the deposit. If a tenant has breached the lease, you may have the right to a claim depending on the situation.
Keep reading to learn the three key things you need to keep in mind when it comes to returning a security deposit.
1. Property Damage
One of the first security deposit tips you learn as a landlord is always inspecting for damage after a tenant vacates a property.
When a tenant leaves, they must leave it in a state similar to how you rented it. Naturally, some damage will have occurred in the property throughout the tenancy. This is known as wear and tear damage and is normal.
Wear and tear is damage caused by daily living on a property, and it could include small holes in the wall where pictures were, loose handles, a reasonable amount of dirt, and tiny stains on walls and carpets.
What is not considered reasonable is considerable wall or carpet damage, broken facilities, missing items listed on the inventory, extensive water damage, and unreturned keys.
If your tenant has done excessive damage to your property, you should start a procedure for getting your security deposit reviewed so that you may keep it to cover costs.
2. Utility Bills Are Unpaid
It is the tenant's responsibility to pay for all utilities used during the duration of the tenancy. This includes periods when they may not have been in the property and when they vacate the property at the end of the contract.
Tenants are responsible for providing final meter readings to the suppliers when they terminate the contract, and these readings should align with the last day of the tenancy.
Top tips for landlords include making sure that you also note down the final meter readings as your tenant leaves the property. You can then check any future bills against these readings to ensure you are not paying for anything the tenant owes.
If the bill is outstanding from the tenancy, you may deduct it from the security deposit.
3. Lease Broken Early
When a tenant signs a lease, they are signing for the entirety of the contract. If they break the lease early, the landlord could be entitled to claim all or part of the security deposit for the breach of contract.
This will depend upon the wording of your tenancy agreement with your tenant and the rules of the state in which you live. One of the good landlord tips is to make sure you are ironclad on your local state rulings before entering into a lease agreement with a tenant.
The Rules for Returning Security Deposits
As a landlord, you must return your tenant's security deposit promptly per your state's rules. Hopefully, this article has shown you that there are instances where you may have a claim to make on the deposit, so you do not lose out on your investment.
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