Inherited Lease, No Move-In Form Available

[John Dehn]

I purchased a 6bd student rental 18 months ago with renters in-place. 2 of the 6 residents have lived there 3 years with the others living there 1-2 years. Prior to that, one of the 3-year residents had the property passed to him from his older brother. For the last 5ish years, there was at least one rollover tenant year-to-year.

The tenants fully moved out this year and are sending me messages demanding their full security deposit back because they’ve been great tenants and always paid their rent on time. I just got the maintenance and repair bills back from my property manager (who I hired approximately 8 months ago because I’m out of town) and the turnover costs were approximately $8k ($3k patch & paint, $900 for a new fridge because lots of interior parts were broken, $900 for deep cleans, door repair, labor, etc). When I bought the house, I noticed significant drywall patches that were unpainted but overall the house was in decent condition. 

My question is this - if the previous landlord never did a move-in form and the tenancy has been passed down through a fraternity for 5+ years, what’s my obligation to prove the damages occurred during this current group’s tenancy? My lease states a move-in form was provided to the tenants and was required to be returned within 7 days for otherwise everything is assumed to be in good working order. The previous landlord was unable to find a move-in form.

When I was in college, I just assumed my deposit was gone the day I moved in even if I took great care of the house. Worst case scenario is I get sued and have to pay twice the deposit back in damages via small claims court.