Damages in excess of security deposit

[Bruce Yi]

Hi, my tenants just moved out and the property is a complete mess to the point where a full rehab may be needed. The security deposit is approximately 10% of total repairs so it won't cover most of the damages. What's the proper course of action?

Thanks in advance.

[Nathan Gesner]

Quote from @Bruce Yi:

Hi, my tenants just moved out and the property is a complete mess to the point where a full rehab may be needed. The security deposit is approximately 10% of total repairs so it won't cover most of the damages. What's the proper course of action?

Thanks in advance.

1. Focus on turning it around and getting it rented as quickly as possible to minimize losses.

2. Send her a bill and give her 30 days to pay in full. Let her know you'll send her to collections if she refuses. You can offer a payment plan, but I wouldn't stretch it out more than six months.

3. She won't pay, so be prepared to send her to collections. Don't expect her to pay them, either. You may never collect a dime, but at least it will sit on her credit and prevent her from taking advantage of others or qualify for a loan.

4. Better tenant selection and regular inspections will stop this from happening.