How to handle security deposit logistics of inspection/notices

Question

Hello folks,

I became landlord by chance and this is my first time having to go through giving back a security deposit to a tenant, so please bare with me.

It was physically impossible for me to be present at the final walk through with my tenant.

So I was able to get someone to meet the tenant at the property for the keys and to basically do a quick walk through to makes sure there was nothing major going on or left behind.

In my state, TN, apparently, if the tenant is present for the final walk through then the landlord has to give the tenant right there on the spot a list of damages that would count against their deposit.

But since this list of damages was not compiled during this final walk through, does it mean that I now have to refund the full deposit to the tenant even though there are a few things that I need to count against their deposit?

Here is the code: "At the mutual inspection, a comprehensive listing of ascertainable physical damage, along with a repair cost estimate for each item, should be reduced to writing and signed by both parties. Id. The signatures of the landlord and tenant are conclusive as to the accuracy of the listing, except the tenant may be liable for additional damages found after the inspection."

The code also states that the landlord can discover damages up to 30 days after tenant moves out and that the security deposit must be returned to tenant within 30 days after they moved out.

If I must give them the deposit back due to failure to give them an on the spot checklist of damages. Do I have to first mail the check to them and THEN send them a checklist of damages discovered during the 30 days and just hope they pay me the damages back?

Thing is I won't be able to see the property for at least another 2 weeks to get an accurate list of damages.

What is the order I need to get this done to stay on the up and up ?

Thank you very much for your replies.

Also that tenant can be present for the inspection and the landlord

That the deposit must be returned within 30 days.

John Thedford · Answer

@Dan Earl

Dan: google your state landlord-tenant laws and print them out for future reference. They are your guide book to make sure you stay legal. Anything you are not sure of, see if you can get an attorney to answer without charging you an arm and a leg.

Nathan Gesner · Answer

@Dan Earl I'm sorry nobody has responded. I've barely been on BP this week due to my schedule or I would have at least made an attempt.

CLICK HERE for the inspection process in Tennessee.

I have to admit, this is a pretty liberal policy!

The inspection must take place within four days of the vacancy and you must allow the tenant to be present. If there are damages, you are to create a list of damages and an estimated cost. The Tenant has to sign it and accept the charges or they can refuse to sign and take you to court to contest the charges.

Unfortunately, your friend did not create a list so you will have to refund the deposit and eat the loss. I hope it's not a large amount!

Not to belabor the point but this is a great example of why it's important to know your state laws and adhere to them. In the future, I would try to schedule the inspection so that you can participate via facebook live, skype, facetime, or some other app or train your friend to do the inspection and document it properly.

Marcia Maynard · Answer

@Dan Earl   Welcome to the world of landlording!

First, take a deep breath.

Most tenants want their security deposit back as soon as possible. Some will try to pressure the landlord into giving it back in full and on the spot. Don't cave into their demands, but do inform them of the process.

If you have 4 days to do your initial inspection with the tenant, make the most of it, but don't prematurely commit yourself to specifics regarding the return of the deposit. If you have 30 days to complete your accounting and move-out report, let the tenant know that you won't be returning any portion of the security deposit until you have completed all the necessary steps.

You need skilled "boots on the ground". Someone who knows how to do a move-out inspection with a tenant. There is a knack to it. Most lay people don't know what to look for, or what is damage vs. normal wear and tear, or how to interface with the tenant.

If your friend who did the walk-through is willing to go back to the property and can follow your directive, give them the tools they need to do the job well. There are some pretty good move-out checklists available on-line. Do a google search. Better yet, contact the local landlord association and see if they have materials and mentors that can assist you.  Since you can't be there, your friend becomes your representative, so make sure they understand what is required by the law for your jurisdiction.

Talk with your friend right away and find out what they saw, what they did, and what their impression of the situation is.   I'm sure next time you will be better prepared.  You're still on a learning curve, so be kind to yourself.

There may or may not be any significant damage. The amount of normal wear and tear may be significant or not much at all, depending on how long the tenant has lived there. Our goal is to return  100% of the security deposit to the tenant. If a tenant leaves the place clean and without damages, and has no outstanding rent or fees still due, then we will be able to do so. If you let the tenant know that you will handle the matter fairly and honestly, they will  have nothing to fear.

For the future.... it's best to do periodic inspections during the tenancy and to charge for damages as they occur or as you discover them. It you wait until the end of tenancy, the security deposit may not be enough. You will have less leverage to get a tenant to pay for damages if they have already moved out.

We prefer to do a preliminary walk-through as soon as we receive the tenant's notice to vacate. At that time we give them directions as to what is required to make the process as smooth as possible for all parties involved. Then we offer to do a walk-through with the tenant after they've emptied the unit and turned over the keys to us. In the course of doing the turnover cleaning, maintenance and repairs, we may discover damages we missed. If we do, we contact the tenant and talk with them about it. We want to make sure the tenant is not blindsided when they receive our final report and return of deposit.

As long as you act with integrity and within the boundaries of the law, you will be fine.

John Underwood · Answer

Dan,

It sounds like you still the opportunity to claim damage found after the fact. Make sure the damage is legitimate and take pictures. If it were me I would take out damages and sent them a letter and check. Explain the damages. Maybe get quotes for the repairs in case your questioned later. If they don't contest it you should be fine.

Make sure that if they tool this to court that the fine for not being 100% Correct is just what you withheld and nothing crazy.

Consult an attorney if your not sure. If the penalty for being wrong is hefty then you might want to give them all the deposit and move on.

Hope that helps.

John Thedford · Answer

You need to talk to an attorney in your state to get the best advice. I am quite familiar with FL landlord-tenant law but  not other states' laws.

Dan Earl · Answer

Thank you for replying Nathan,

I am still within the 4 days, so I wonder If I could just have my friend go back and do a proper inspection with her this time, but she may refuse and then at that point if she refuses because she already went there, would I be back to losing any claim to the deposit?

I will be able to inspect the house myself in a few days, but out of the 4 day window and inside the 30 days allowed by the lease and TN code for discovering more damage. Landlords can find additional damage after the initial inspection and they are responsible for it.

I am curious whether I also forfeited my right to find damage after the inspection within the 30 days. If I didn't forfeit my right to find additional damage, will l have to "first" send them their deposit and then come up with an itemized list of damage and send them a bill and take it from there?

Sorry for the lengthy write up and thanks for replying!

Dan Earl · Answer

bump

Dan Earl · Answer

I should add that tenant is requesting deposit to be immediately sent to him. So I need to figure this one out asap. Thanks

How to handle security deposit logistics of inspection/notices

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