All Forum Posts by: Misty Alderman

Thank you, Alex, for your quick and informative response!

However, I guess I should have clarified better. The lease term is up, and a new one will begin with one original tenant and one new.

How would you handle the deposit, esp. if you intent to make a claim on it? Return full deposit to boyfriend and girlfriend less $200 for damages, then collect again from boyfriend and roommate (new joint tenants for new lease term), and hope things aren't awkward with boyfriend tenant that is staying on? Would I have to make a claim this year, since that is when the damages occurred?

Or could I document it now with them (have already pointed out to them so they are aware) and note that if not fixed would have to collect it out of their half next year? Thanks!

Hi Bigger Pockets Community!

Have a question on how to handle a security deposit and new lease term for a rental. Last year, a boyfriend and girlfriend duo moved in.The girlfriend has graduated college and gotten a job so has moved out; the boyfriend would like to remain another year to finish school, and bring in a roommate. So it will be just the boyfriend and the roommate for the next lease term.

My question is: How do I handle the current deposit? Do I need to return it to both boyfriend and girlfriend and then receive ½ back from the boyfriend and collect ½ from the new roommate? Or can I just return ½ to girlfriend and collect ½ from the roommate, keeping the other ½ “on file” from the boyfriend?

If the boyfriend girlfriend were moving out and I was dealing with new tenants, I would make a claim for a couple hundred dollars out of their deposit (they didn’t put pads underneath their furniture as specified in lease, and the hardwood floors we refinished before their move in are scratched as a result; we laid a pallet of sod for them that was well established for a few months, but they didn’t water it when it needed it due to lack of rain, and “neglect of landscaping” in the lease as well), but I don’t want to make things awkward for this next term with the boyfriend by putting a claim in for this term.

We do joint leases, but might individual leases work better in this situation? What would be the process as far as claiming damages go when someone is already in place? And the “move in” process for the new roommate?

Thanks a lot for your assistance and insight!

Hi Bigger Pockets Community!

Hoping you can offer some advice: My husband and I partnered on a house with another couple to rehab it and rent it out.That was the intention, anyway. The guy from other couple abruptly lost his job (through no fault of his own, was a political play) and was offered a replacement job (though making $40K less!) 2 hours away, so he is out of the picture and the wife is waiting to get a job in that town and move as well. They are looking to recoup their costs so we will be putting it up for sale and that will be the end of that partnership. This is the first time my husband and I have partnered with anyone, and we don’t want to complicate the paperwork and sale, but are interested in knowing:

1) How you could prove intent to use as rental (other than advertisements, meeting with prospective tenants, etc.); how would you report this “intent” to the IRS? Is there a field on a form to complete, or does intent just have to be proven in case of audit? I thought I read somewhere that they automatically disallow holdings of 1 year or less, otherwise everyone would try to claim intent to avoid capital gains taxes. This is our first house sale other than primary residence.

2) Could a 1031 exchange even be possible for our side of the transaction? We split the expenses to fix it up, and we will be splitting the proceeds from the sale. Conveniently the house next door is up for sale at a great price and my husband and I are looking to purchase it after it comes out of probate to use as a rental, so they are like kind, and I understand the 45 and 180 day rule and need for a QI. We estimate each couple would make ~$30K. Would it even be possible to try to separate our potential $30K share within the sale documents for 1031 with this other property?

Thanks so much for your input and suggestions, we really appreciate it!!!!!