Using security deposit to cover last month's rent

When can tenants exercise this right?

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jun. 30, 2011

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When can tenants exercise this right?

Robert Griswold
Inman News™

Q: One of my tenants did not pay rent for the month of May, and when I called him to ask where the rent check was, he told me he was giving notice and would be out on or around May 31. I told him I still needed May rent. He told me to use his $1,200 security deposit. The rent is $1,255, and I served him with a three-day notice to pay or quit.

On May 9, I received a certified letter from him telling me he was leaving. He told me if I did not give him a good reference for the next place he would be stuck with me for about six months. What should I do?

A: I completely agree that you must insist on receiving the full May rent regardless of whether the tenant plans to move at the end of the month. The tenant should not be allowed to use the security deposit for rent, as you likely could have a situation in which you would not have enough security deposit left to cover for any additional unpaid rent, cleaning, or damages beyond normal wear and tear.

You have no idea what the condition of the unit will be until the unit is vacated. Even if you do a pre-move-out walkthrough, there could be damage done after that or during the actual process of vacating the unit. Most damage to rental units is done during the move-in and move-out times.

The issue of a reference is an interesting threat, but you should make it clear that you will give him a positive reference only if he pays the rent as he is contractually required to do. He will then receive his accounting for any remaining balance, after any lawful deductions, of his security deposit, as is required under applicable law.

If he does not pay the rent, you should serve him with an appropriate notice to pay rent or quit. If that does not get him to pay, then forward his file to your tenant-landlord attorney to file an eviction. If you have to do that, you will not only receive possession of your rental unit but also be awarded a money judgment for all unpaid rents, attorney fees and court costs. You might mention how you plan to proceed if he doesn't pay and that the potential cost is much higher. Hopefully, he will realize you mean business.

Q: During a recent severe windstorm, a fence blew down at a rental I own. It took about a week to get a new fence built. The tenants have a large dog, and a pool fence confined him to his regular area of the yard. The downed fence wasn't too much of an issue until the neighbor's dog got into the yard through the downed fence (according to the tenant). The neighbor's dog caused the tenant's dog to try to get through the net-paneled pool fence, ripping a large hole in it.

I'm not sure yet if I'll able to replace just the single panel or if the whole fence will need to be replaced.

The tenants are moving out in a month and I want to be fair about the fence. Is the cost to repair or replace the fence my responsibility, the tenant's, or do we share the responsibility? They have otherwise been good tenants. Likewise, I have been a good landlord, releasing them early from their lease when they needed to relocate to be closer to a job. I look forward to learning your thoughts.

A: You raise a good question and one that illustrates how landlords and tenants need to be fair and reasonable in resolving these issues when they arise. Your decision to allow your tenant to break their lease early to relocate to be closer to their job is commendable, but these are two different situations entirely.

Based on what you described, the fact is that the fence was damaged by a windstorm. While it didn't affect the area where your tenant's dog resides, the ability of the neighbor dog to go through the wind-damaged fence and get to your tenant's dog is the issue.

There are no facts here that were due to the negligence of your tenant.

You could argue that once the fence was down your tenant should have done something to keep their dog inside or elsewhere, but that wouldn't be reasonable and may require your tenant to incur costs to board the dog or to have someone stay home with the dog. Then your tenant's dog reacting to the neighbor's dog coming into the yard through the open fence and trying to get through the pool fence does not seem unreasonable either. As they say, dogs will be dogs!

I think that you should bear the cost of repairing or replacing the pool fence and might want to contact your insurance agent to see if you have coverage for the damage, as it was caused by a storm.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and "Property Management Kit for Dummies" and co-author of "Real Estate Investing for Dummies."

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