What you can and cannot claim from a tenant’s security deposit after they vacate your rental property.
Please remember that I am a property manager, not an attorney. This is my opinion as a professional property manager, and if your attorney tells you something different, listen to your attorney.
Why move-in and move-out inspections are important
First, we recommend you do not make a claim on anything you cannot prove if you were standing in front of a judge. What this speaks to is the quality of your move in and move out inspections. You should have a lot of photos, or we prefer videos, that can prove whatever claim you are making. If there is a hole in the living room wall, you have to prove that the hole was not there when the tenant moved in. You cannot claim for it unless you have the proof.
You can only claim money for what you are going to fix
Second, do not claim for work you don’t do. Here’s an example: your tenant moves out and there are scratches on your hardwood floors. You are really upset about it, understandably, but you choose not to have the scratches repaired. If you do that, you cannot claim for scratches and withhold money from the security deposit. That would not look good if you were standing in front of a judge. The work has got to be done.
You cannot claim for fair wear and tear
Third, you cannot claim for fair wear and tear. Think about carpets. If you’ve got wear patterns on them, that’s probably fair wear and tear. Little nail holes in the walls are also considered fair wear and tear. Tenants have the right to hang pictures throughout the property and you cannot charge the deposit for those little nail holes.
You should not charge the tenant dollar for dollar on things that wear out naturally.
Carpet and paint are the two biggest issues here, because they have a lifespan. You have to depreciate them if you are going to claim their replacement against a deposit. Suppose you put a reasonable quality carpet into the property. That carpet might have a lifespan of five years. If your tenant lives there for three years, and when they move out the carpet has to be replaced, you cannot charge for the full replacement cost. You would have to charge for the remaining life of the carpet, which would be two years on that five year lifespan, or 2/5 of the replacement cost.
Hopefully this information will help you figure out what to claim and what not to claim when you are evaluating how much of a security deposit to give back. Contact us or give us a call if we can answer any questions at (813) 875-7474.