Holding on to a tenant’s security deposit can offer you at least some collateral to make repairs that are needed when they move out. But what if the damages are excessive and the security deposit isn’t enough?
There are actually a few steps you should follow. First, in order to legally withhold the tenant’s deposit, most locales will require that you send a letter letting them know why you are doing so. If these funds won’t cover everything, you will also need to send the tenant a demand letter asking them for the balance.
If you receive the needed funds, great! But if you don’t – which is oftentimes the case – you may need to take the next step which is going to small claims court. The good news is that you are likely to win the case – especially if you can show proof of the damages, and the costs that are required to fix them.
But even if you win your case, there can still be some drawbacks. For instance, even if the tenant wants to pay you what they owe, if they just simply don’t have the money, you’ll still be unable to collect. In addition to that, you could be out even more money by having to pay court filing fees. You will also be out all of the time it takes to go through the small claims court process.
One of the best ways to ensure that you have proof of damages is to conduct an inspection prior to the tenant’s move in date, as well as regular inspections over time. While this, too, can be time-consuming, the time that is spent doesn’t have to be yours.
Partnering with an experienced property manager can save you a great deal of time. Not only will a property management team market the property to fill vacancies, screen tenants, and deal with day-to-day maintenance items, they can also respond to emergencies.
Want more details on how a property manager could work for you? Give us a call today.