With all the work that comes with a tenant leaving, trying to take care of every detail can be hard. However, keeping track of those details is essential for Houston Heights property owners, particularly with regards to refunding a former renter’s security deposit. Depending on where your rental property is situated, mishandling the security deposit refund can result in pricey and unnecessary legal battles. Knowing the best practices for returning security deposits is going to help you fulfill your obligations as a landlord as well as help ensure that you avoid any unwanted legal issues.
A security deposit is not income. The deposit is money held for your tenant (so it is their money). This deposit should not be spent or utilized while the renter is leasing your property. Your lease has to include a clear and specific language that defines the circumstances wherein all or a portion of the security deposit will or will not be refunded. The main reasons to keep some amount of a tenant’s security deposit include recovering past-due rent, damage to the property (above ordinary wear and tear), unpaid utilities, or removing abandoned personal items. The amount you can keep and for what reasons are contingent on local and state laws so you should make sure that you clearly understand the regulations in your area.
Likewise, each state has a timeline for returning security deposits to past renters. The timing can differ based on the place but usually ranges from 14 to 60 days beginning on the day the tenant turns over possession of the home. Failing to return a security deposit and any related documentation of amounts withheld by the required deadline may result in a number of consequences, such as:
- losing the right to deduct any portion of the deposit for damages or unpaid rent
- facing a lawsuit in small claims court
- other monetary penalties allowed by local or state law (e.g., owner to pay 3 times the deposit)
It is crucial to include a statement detailing the refund and use a check for a clear paper trail when refunding a security deposit, may it be partial or in full. If you have withheld any portion of the deposit, you might also be required to send receipts stating the amounts withheld and the reason for each one. Creating and sending clear documentation is the greatest defense for any landlord against any accusations of mismanaging a security deposit.
Having knowledge of the ins and outs of returning a security deposit is an important element of successful Houston Heights property management, but so is having the right people on your team. Real Property Management Heritage can take care of all the details for you such as streamlining your move-out process, security deposit refunds, and ensuring you and your property stay clear of legal trouble. If you would like to know more, contact us online or give us a call at 832-708-8157 today.
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