Breaking the mindset of the Security Deposit covering the last month's rent

[Mark Yuschak]

This is something I routinely struggle with in my rental business. Nearly every tenant thinks their last month rent is to be covered by the security deposit. Each time it comes up, I have to school them about what the deposit is actually for. About 50% of the time I will get the last month's rent, then refund the deposit as applicable. The other 50% of the time they don't pay and assume the deposit has them covered.

In the case where they don't pay, I treat it like they're delinquent and issue the 7-day notice. Usually it falls on deaf ears and they still move out. If they don't move out, at least I've gotten the process started and not wasted any time (and only a First Class stamp).

Does anyone else have this issue? Any tips to help overcome this tenant mindset?

[Account Closed]

I had this problem with a tenant last year. Fortunately in Texas tenants are liable for 3x the amount they withhold. I ended up sending a notice copy/pasting the verbiage from the property code and filed for eviction filing for non-payment of rent as well. Not sure if Michigan has something similar.

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Sec. 92.108. LIABILITY FOR WITHHOLDING LAST MONTH'S RENT. (a) The tenant may not withhold payment of any portion of the last month's rent on grounds that the security deposit is security for unpaid rent.

(b) A tenant who violates this section is presumed to have acted in bad faith. A tenant who in bad faith violates this section is liable to the landlord for an amount equal to three times the rent wrongfully withheld and the landlord's reasonable attorney's fees in a suit to recover the rent.