Damages That Exceed The Security Deposit

[James Wachob]

What does state law say about this?

Due to damages exceeding the security deposit all funds will be retained by Foundation Property Management, LLC. This does not exclude the resident from future obligations to pay the costs needed to repair the property.

Allowable Deductions on Security Deposits in Tennessee

At the end of the lease, the landlord may deduct the following from the security deposit:

1. Unpaid rent.

1. Other amounts due and owing to the landlord.

1. Cost of damage to the unit found during the inspection.

1. Cost of damage to the unit not found during the inspection.

To clarify item number four above, damage to the unit that was not found during the inspection.

Inspection as Basis for Charges Against the Security Deposit

Charges from the security deposit should be based on an inspection of the unit at the end of the tenancy.

If the tenant failed to show up for the inspection, the tenant loses the right to dispute the damage found after the inspection. Also, the tenant will not have a right to be present during the inspection if the tenant:

1. Abandons the unit.

1. Vacates the unit without giving written notice.

1. Did not respond to the landlord’s notice of the tenant’s right to be present during the inspection; or

1. Failed to appear or show up in a timely manner during the inspection.

Can the Security Deposit be used as Last Month’s Rent? The security deposit is not meant to be applied to the last month’s rent.

Failure to Provide this Checklist: If the landlord does not provide the tenant with this checklist will cause the landlord to forfeit the right to make deductions from the security deposit.

Normal Wear and Tear Vs Damage

The charges do not include damage due to wear and tear. Below, we compare the difference between “Normal Wear and Tear” and Damage.

• “Normal Wear and Tear” refers to minor issues that occur naturally as a result of the tenant using the property as it’s designed to be used, aging, and expected decline as a result of everyday living. These minor issues can include gently worn carpets, loose door handles, fading wall paint and flooring, stained bath fixtures, lightly scratched glass, and dirty grout.
• “Damage” refers to the destruction that is a result of abuse, negligence, or carelessness by a tenant during the tenancy period. Damage to the rental property can negatively impact its usefulness, value, and normal function. Damage can include pet damage (stained and ripped carpet), broken tiles, holes in the walls, broken windows, and missing fixtures.

What is ‘Normal Wear and Tear’?

At the end of a tenancy, the unit must be restored to its original or pre-tenancy state so that it can be rented out again. Who, between the landlord and the tenant, will be responsible for the cost of doing the same will depend on whether or not it counts as “wear and tear.” If repairs or restorations are for ordinary wear and tear, then the landlord must pay for it. If the same of for damage beyond or not included in normal wear and tear, then it may be chargeable to the tenant or the latter’s security deposit.

Tenant’s Obligations

To comply with these obligations, the tenant must:

• Comply with all building and housing codes materially affecting health and safety.
• Keep the premises clean and safe as the condition of the premises when the tenant took possession.
• Dispose of all ashes, rubbish, garbage, and other waste to the designated collection areas and into receptacles.
• Not deliberately or negligently destroy, deface, damage, impair or remove any part of the premises or permit any person to do so; and shall not engage in any illegal conduct on the premises; and
• Act and require other invited guests on the premises, to act in a manner that will not disturb the neighbors’ peaceful enjoyment of the premises.

A landlord may adopt rules or regulations concerning the tenant’s use and occupancy of the premises. It is enforceable against the tenant only if its purpose is to promote the convenience and safety of the tenants in the premises, protect the landlord’s property, and make a fair distribution of services and facilities. The rules also must be reasonably related to the purpose for which it is adopted, applies to all tenants in the premises, is not for the purpose of evading the obligations of the landlord and the tenant has notice of the new rule or regulations.

Returning Security Deposits in Tennessee

Time Frame: Tennessee landlords are required to return a tenant’s security deposit or any part of it that is left after making the allowed deductions. Landlords are typically required to return the same within 30 to 60 days of the tenant’s move-out date. If there is any refund due to the tenant, the landlord must notify the tenant of the same.

Unclaimed Deposits: If the landlord does not receive any response from the tenant regarding the refund 60 days [6] after sending the notice, the landlord may withdraw the remaining amount to be refunded from the account where it is held and keep the same without any further liabilities.

No Valid Mailing Address: Should the tenant leave without leaving the forwarding address, the landlord is only required to send the notification about the refund to the tenant’s last known address, or the last reasonable determinable address. This means that the landlord must exert reasonable effort to at least try to find out the tenant’s new address. This also means that the 60-day period starts when the landlord sends the notice to the last known or “knowable” address, regardless of whether or not this is the correct address.

Additional Rules & Regulations in Tennessee

Receipt Requirement: A landlord or property manager is not required to provide a written receipt to tenants for a security deposit.

Interest Payments: Tennessee landlords are not required to pay a tenant interest on their security deposit.

Security Deposit in Regard to Fire or Casualty Damage: If the dwelling unit or premises are damaged or destroyed by fire or casualty to an extent that it is substantially impaired, the landlord must return the security deposit. Due to damages exceeding the security deposit all funds will be retained by Foundation Property Management, LLC. This does not exclude the resident from the future costs needed to repair the home.