Fighting over the Security Deposit is one of the main issues between Landlords and Tenants. What steps do you take as a Landlord or Property Manager to ensure the deductions from a Security Deposit are not disputed? If the charges are disputed, how do you ensure you win your case in court?

Frank, that sounds like a good alternative but let me play Devil's advocate. Let's say the place rents for $1,000 a month so you charge $99 for the first month and $82 per month for month 2 - 12. On month four, you've collected a total of $345 towards the deposit. Tenant fails to pay rent so you start the eviction process and - one way or another - are able to get him out before the end of the month. Best case scenario: you turn the place around in a few days and find a new renter to move in on the first day of the month. You're out a minimum of $665 plus minor cleaning costs. Worst case scenario: Tenant didn't pay his utility bill and there are frozen pipes or a fridge full of spoiled food, some carpet is trashed, there are holes in walls and doors, and the place is full of pet hair, odor, and stains. You lose $676 in rent plus another $2,000 in repairs and cleaning. My point is, your plan benefits the Tenant by making it easier to move in but it puts you at a higher risk of losing money when something goes wrong.I'm preparing to switch to a "no deposit" option with Obligo (there are other companies providing the same service and I fully expect it to become more common). I essentially offer tenants a choice: pay the standard deposit or use Obligo. If they choose Obligo, they have to register a credit card and bank account and then Obligo charges them a monthly fee based on the value of an ordinary deposit. For example, instead of a tenant paying a $1,500 deposit prior to occupancy, the tenant would register their credit card and checking account and then pay Obligo a $10 monthly fee. If the tenant leaves owing anything, I submit a claim with Obligo and they pay me up to $1,500 with no questions asked. They then pull that amount from the tenant's account or credit card. If the tenant manages to close their accounts without Obligo finding out, Obligo will still pay me and then go after the Tenant to get reimbursed.It's sSimilar to what you are trying to do but the risk is with Obligo, not me.

I got so tired of this that I only charge a $99 security deposit now. I build the cost of the rest of the deposit into the monthly rent spread out across the year

Document everything! Pictures speak a thousand words when it comes down to going to court. Take pictures before, write detailed notes on what updates you did and what cosmetic flaws you've found. I send my version to the tenant when they move in and I provide them with their own copy to submit to me within three days of moving in. That way if they find something I didn't, it's documented and they end up feeling more valued.When it comes to them moving out, again, document! Take a thousand pictures if you have to. Have them conduct their over move-out and then go in after and do your own move-out. Save every receipt- make a note beside it with what it went to and whether or not it was a landlord expense or tenant expense, and compare the move-in with the move-out. After you've processed it, send them everything you have and what they owe or don't owe. It's a longer process but it's worth it if you don't have to go to court. Hope this helps!

I should also point out that it is not my goal to keep damage deposits. If we do a couple hours of general cleaning after a move out, I just consider that cost of doing business. If I spend actual dollars and cents, I then charge the tenant.

First, I never have to "argue" about a deposit because everything is so heavily documented before/after. If a tenant contests a charge, I respond with pictures of the before/after and a form with instructions for contesting the charges. I haven't had a tenant request an appeal in over five years.Second, if there's just an hour or two of cleaning, I'll usually eat the cost. Anything more than that and I'm charging them for it. The only exception is if I'm not certain the tenant is responsible and I have no documentation to back up the charge. That rarely happens.

We give the tenant a checklist along with the typical prices they will be charge should they not meet their move out requirements. It's published right on our website but we also mail them a copy to hang on their fridge, so they have to look at it everyday until they move out.

Detailed move-in inspection form signed and dated by tenant and manager along with photos, then a move-out inspection report with photos. Put those two together and it carries real weight and helps avoid court. If you do end up in court, the judges LOVE that type of documentation.Also, make sure the deductions for repairs are 'industry standard', ie, no $500 bill for replacing a broken toilet handle. Lastly, make sure you get out the security deposit refund letter and appropriate check (or a bill) WITHIN THE ALLOTTED TIME as per your state L/T laws.

LOVE this idea @Nathan G. "If a tenant contests a charge, I respond with pictures of the before/after and a form with instructions for contesting the charges. I haven't had a tenant request an appeal in over five years."New landlords, please take note.

We video and take tons of pictures prior to a tenant moving in. If there are imperfections, such as prior water damage under the kitchen sink, we document that as well. We do not want to charge a tenant for any damage they have not caused. We used to do a walk through with said tenants for a move-in inspection, but we stopped that. Now, I email the Move-In inspection sheet to the tenant after they move in and tell them to email me pictures of any problems or damage they notice within the first 14 days. If they do not state there is any damage, then they are acknowledging it's all good. At move-out, if we are going to charge anything from the deposit, we document with pictures and receipts of actual money spent to fix the damage. We then notify tenant in writing, with copies of receipts, within 30 days, according to state law. Even if we do not charge them anything, I wait about 2-3 weeks to return their damage deposit, just in case the new tenant notices some damage that I did not.

We have the tenant fill out a move in inspection sheet themselves, that they sign. We use that to compare the condition of the unit upon vacating it. We give them a list of move out instructions to follow that includes cleaning and removing all trash (as well as emptying the trash cans). We email it and tape it to their doors as well so they can't claim they didn't get it.We send them an itemized list of any deductions plus interest accrued after move out (and within the 30 days). It's coming but I haven't had to go to court in the 5 years I have been doing this and I have taken 90% of security deposits in some cases where the house was absolutely trashed. As I have gained experience I am less and less afraid of going to court. The way some people leave the apartment is unconscionable.

Landlords: How do you prevent Security Deposit disputes?Landlords: How do you prevent Security Deposit disputes?

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