12 Ways to Avoid Security Deposit Disputes

Nothing beats a security deposit when it comes to protecting a landlord from unexpected losses caused by a tenant. But security deposits can backfire, leading to disputes that are both expensive and time-consuming.
If a landlord’s not careful, they can wind up owing the tenant money! Nothing beats a security deposit when it comes to protecting a landlord from unexpected losses caused by a tenant. But security deposits can backfire, leading to disputes that are both expensive and time-consuming. If a landlord’s not careful, they can wind up owing the tenant money!Nothing beats a security deposit when it comes to protecting a landlord from unexpected losses caused by a tenant. But security deposits can backfire, leading to disputes that are both expensive and time-consuming. If a landlord’s not careful, they can wind up owing the tenant money! Here are 12 rules to follow to help you play it safe when it comes to security deposits:

1. Keep the amount of the deposit under the legal limit. The majority of states do restrict the amount a landlord may charge.

2. To avoid allegations of discrimination, keep the amount you charge consistent from one tenant to the next.

3. Don’t accept payments–a prospect who can’t afford the deposit may not be able to afford rent down the road.

4. State the amount of the deposit in the lease agreement, and provide a receipt.

5. Find out if you are supposed to be paying interest on the deposit.

6. Conduct a move-in inspection, and have the tenant sign the report.

7. Perform periodic inspections to catch damage before the situation gets worse.

8. Near the end of the tenancy, offer to give the tenant a head start via a “pre-walk through” before they move out. Identify any problem areas and explain what is expected of the tenant to receive their full deposit back.

9. Document the move out, including a move out report. Ask the tenant to be present, have them sign the move out form, and get a forwarding address.

10. Discuss with the tenant at the move out if you have identified items for which you will be taking deductions so there are no surprises.

11. When deducting from the deposit, charge the actual costs – don’t estimate, round-up, or tack on a little extra for your trouble.

12. Know when you have to provide an accounting of deductions or give the deposit back. Don’t provide a shorter time period in the lease than what is required by your local laws.

*God Speed*
TLD Investments LLC
http://www.tldinvestmentproperties.com

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