3 Steps For Managing Security Deposit Refunds

Having tenants in our rental properties can be great things when we go through the proper suggested tips to find the perfect fit, but just like in anything, there can be ups and downs. Sometimes we find ourselves in situations that are not ideal and we have to start asking bigger questions such as “What do we do from here?” and “What about the security refund deposit?” By following these steps, we can help you make the best decisions when it comes to your struggling tenants and their security deposits.

1. Double Check to Make Sure Deductions Qualify

In some states, they allow you to use the security deposit refund towards the damage which would be considered more than just normal wear and tear. This is the case in states such as Connecticut and New York. In other states, such as Indiana, this is not allowed. So most importantly, make sure that the security fund is able to be used towards something useful if necessary.

2. Be Sure to Document All Damages

At your first walk through inspection, you will be able to clearly see what needs to be done, but as important as it is to walk through and go through the checklist, it is equally important to document all of these things findings. If possible, arrange a time with the tenants that you are able to go through it together and make the list together to reduce the possibility of deposit disputes.

3. Create a List of All Deductions

Along with documenting everything from the inspection walk through with the tenants, make sure to create a well managed list of the deductions. The items should be written and clearly state how to deposit will be applied back towards things such as rent, cleaning, and other financial requirements which have been stated in the signed lease agreement. Also make sure to include the invoice for repairs and all required receipts.

In all cases, follow the state requirements and laws and handle the tenants security deposits in the best possible way. Not every tenant will be happy with the outcome, but knowing that you did the best thing possible will leave you with the peace of mind.

Contact our Property Management Inc. office, to find out more about the subject of managing security deposit refunds.