Damages after statutory term for returning deposit

Damages after statutory term for returning deposit

MN · Member since 2018 · 78 posts · 19 votes

Hello fellow BPers,

Recently, I had great tenants that moved out after 3 years in a townhome. After they moved, in a routine clean-up, we discovered some broken refrigerator drawers that needed replacing (not really something we would see in a normal walk-through).

We purchased new drawers, seeking reasonable prices because the fridge’s manufacturer had outrageous prices for the items, and we were able to save more than half of the cost used from the security deposit.

So far so good. There was also some damage that we withheld a small amount for repair.

We sent the balance of the deposit to their forwarding address.

MN has a 21 day deposit return guideline. We were well within the timeframe.

However, later, it was discovered that there was no hot water in the home. Thinking the water heater was out, we called a tech, who flushed the system and said all is good. Then he couldn’t get it to light. He left.

We then called another company to check it the following day, that tech suggested replacement.

He replaced the unit, then couldn’t light it either.

Turns out, the former tenants called the gas company and requested gas be SHUT OFF to the home.

In other words, the original unit didn’t need replacing.

We called the gas company, who confirmed that they only did what the tenants asked, which was to do a shut off, and can schedule a turn on.

After checking that the security deposit check wasn’t yet cashed by the former tenants, we canceled the check and immediately sent them a message indicating what took place, the expense and time spent due to their actions, and a request to send the balance of our expenses, which now were more than the deposit balance.

Now they hired an attorney and are demanding the balance.

In the meantime, the townhome’s association sent us a complaint stating that the patch of grass in front of the home needs repair at the owner’s expense because the tenants’ pet continuously urinated in the same areas, causing damage. Now while the association covers lawn care, it excludes pet damage.

So now there’s even more damage that they are not even aware of, well beyond the statutory term to return their deposit.

Advice, likelihood of recovering expenses and the like are welcome.

0Reply
22 views

Most Popular Reply

Janesville, WI · Member since 2018 · 11 posts · 18 votes
4y

If you're trying to get them to pay for that new water heater and the tech calls good luck with that. I don't think you'll have a shot at recovering that money. The tenant just wanted the bill out of their name. You should have been on top of transferring the utilities back to you as soon as they moved out. It is pretty ridiculous that two techs couldn't realise that the gas was off, so I'd avoid using them again. As far as the pets go, if you allowed pets in the unit, can you really expect them to not pee in the grass? Sometimes you have to take a loss or two and write them off as learning experiences my friend.

See this reply in the discussion

12 Replies

Jump to latestLatest
  • Janesville, WI · Member since 2018 · 11 posts · 18 votes
    4y

    If you're trying to get them to pay for that new water heater and the tech calls good luck with that. I don't think you'll have a shot at recovering that money. The tenant just wanted the bill out of their name. You should have been on top of transferring the utilities back to you as soon as they moved out. It is pretty ridiculous that two techs couldn't realise that the gas was off, so I'd avoid using them again. As far as the pets go, if you allowed pets in the unit, can you really expect them to not pee in the grass? Sometimes you have to take a loss or two and write them off as learning experiences my friend.

  • Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    The first thing I do when tenants leave is let them know that utilities are being put into my name the following day and ensure they do.  If you did not do this you are lucky you still have power but expect that to be gone soon as well, there is no reason given that the tenant should be paying for utilities after they leave.  Where you should be getting your money back is from the techs who were too incompetent to check to see that the gas was on but this one isn't on the tenant and you need to credit the money back.  For the grass tenants are responsible for damages beyond normal wear and tear and I expect that there would be a couple brown spots in the grass from dog pee, holes or chewed up fences or another story.  The pet fee isn't 100% free money, floors will wear out faster, decks need more staining, and yards tuned up a bit as well.  Really the only way I think you have a chance to collect more deposit after you returned it is if they purposefully hid something from you but even then that seems hard to prove.  I have 1 month to return the deposit and despite that the ex tenant is always in a hurry I take at least a couple weeks to make sure nothing was missed as once the money is gone it is unlikely I'll get it back.  Next time take your time and be more diligent.  On the bright side though you do have a new water heater so at least you won't have to budget for a new one for a while so there is a positive in everything.  

  • Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
    4y

    Here in NY we have an even tighter timeline (14 days) to return the deposit.  Having learned the hard way (like you did, this time), I have a checklist I use when I am turning over a unit so that all systems are inspected for proper function.

    Another backstop you can add is to include a "move out agreement" which is an addendum to our lease.  In it, it describes in explicit detail what needs to be cleaned upon vacating a unit, and what charges will be be incurred if the tenant does not clean to that expectation.

    Regarding your utilities issue, I have the following clause in the move out agreement:

    • LEAVE ALL UTILITIES ON. We will place them into our name on the day you turn in your keys. If you have the utilities disconnected prior to your legal surrender of the rental unit, you agree to pay a $50.00 reconnection fee as part of your move out charges.
  • Rental Property Investor · Prince George's County, MD · Member since 2022 · 177 posts · 187 votes
    4y

    Hmmm... I'm concerned that the two professionals you hired to diagnose the problem couldn't immediately identify there was no gas service to the home.  I personally don't think those tenants should foot the bill for incompetent contractors or that you followed the advice of one to replace the water heater.

    Additionally, although I'm not sure how the utility handles customer account cancellations in MN, it sounds as if they were simply trying to stop the service in their names, not be malicious.

    Regarding the pet situation, it sucks... but you DID allow them to have a pet.

    You may have to eat crow on this one.

  • New to Real Estate · Worcester, MA · Member since 2021 · 63 posts · 48 votes
    4y

    That's great advice on the checklist. A great resource for checklists is BP's own The Book on Managing Rental Properties! 

    I can see a scenario where utility transfers could be confusing without clear move-out instructions. 

    You need better plumbers! Sheesh, no one checked if they had gas flow...

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    The hot water tank and the gas not being turned on suggests that the techs who came to look at it were not good.  It isn't the tenant's fault that neither tech didn't think that the gas might be off.  When a tenant moves out, you need to transfer all of the utilities back into your name (or the new tenant does).

    for the patch of grass, go to a box store with a garden centre, buy  a few pieces of sod and replace the dead grass.

  • MN · Member since 2018 · 78 posts · 19 votes
    4y

    Thank you all for the insight and pointers. Definitely a learning experience. I’m going to resend them the balance of their deposit.

    By the way, the two techs that came were from two different water heater companies, which I’d obviously not use again. It does make me wonder about everyone’s professional competence now.

    As for a pet fee, there wasn’t one. Nor was there a pet deposit, as it was an emotional support animal (though we never charge pet rent anyway, only a refundable pet deposit).

  • Melanie ThomasBusiness Member
    Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
    4y
    Quote from @Michael Nahm:

    Thank you all for the insight and pointers. Definitely a learning experience. I’m going to resend them the balance of their deposit.

    By the way, the two techs that came were from two different water heater companies, which I’d obviously not use again. It does make me wonder about everyone’s professional competence now.

    As for a pet fee, there wasn’t one. Nor was there a pet deposit, as it was an emotional support animal (though we never charge pet rent anyway, only a refundable pet deposit).


    Great decision here. We win some and we lose some. Great learning experience and I bet it won't happen again! ;P Happy investing!
    RentWerx Property Management4.73296 Reviews
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y
    Quote from @Michael Nahm:

    You are in the wrong.

    1. Did you instruct the Tenant in keep the gas on?

    2. Why didn't you - as the property owner - confirm utilities were on and switched back into your name? Your process should be to confirm utility transfer every time a tenant moves in and every time a tenant moves out.

    3. Your plumbers are idiots and that's who you should be going after for compensation. I'm not a plumber, but even I know how to check to confirm gas is on before trying to light an appliance. They replaced a water heater without even confirming the gas was on???

    The DIY Landlord Book4.7248 Reviews
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    By the way, if this were me, then I would contact the Tenants and apologize for blaming them for what was clearly the plumber's fault.

    The DIY Landlord Book4.7248 Reviews
  • Investor · Van Isle · Member since 2021 · 455 posts · 226 votes
    4y

    If you cancelled return of the deposit for such bogus reasons, you may now have exposed yourself to penalties within the regulations. Hopefully your good, but now unhappy tenants are understanding.

  • Rental Property Investor · FL · Member since 2016 · 271 posts · 92 votes
    4y

    I am a landlord. That replacement is not tenants fault. You have to get better and be on top of things for utilities schedules. Cringe to read that you went after the tenant when is not their fault. This is a lovely case to watch in Peoples  Court. Let it go, and give them their due deposit balance. Take your lesson move forward.

    Best wishes good luck.

    (p.s. to all up coming landlords, We are to be of great service to these families making us money, and if you are not making money after giving an excellent product, and using your system to place excellent tenant, then this game is not for you)

Join the conversationCreate a free account to reply, vote on answers and follow this thread.