Updated about 10 years ago on . Most recent reply
Security Deposit - withholding late fees
I (with two siblings) inherited some commercial property that was already leased out - in Texas. The tenant is now moving out (end of lease). There is a security deposit (that we did not actually receive - we did not get any cash as part of the inheritance).
Every month for the past year the tenant has been late paying rent. The lease does allow a 5% late fee for rent more than 5 days late (and it was always at least 10 days late). One of my partners was in charge of the finances, and never requested the late fee from the tenant.
She now wants to deduct the late fees from the security deposit. The lease states the security deposit is for the repair of any damages to the property.
I do not believe we can legally (or ethically) deduct the late fees from the security deposit. But my partner is insisting on doing it.
I just passed my real estate license exam, though have not signed with a broker yet. I do not want to do anything jeopardize my license.
So, questions - Can we legally withhold the late fees? And if my sister does it anyway, can I as a real estate agent get in trouble?
Thank you for any help you can provide!
Most Popular Reply
You did not force issue on late fee so you basically gave up that option, do not try to collect retroactively.
As a Realtor you are going to be held at a higher standard.
You inherited the house so you inherited the debt for the deposit, Do a google search and read the laws in your state concerning security deposits you could end up paying him several times that amount if you do not do this correctly.