The Security Deposit and the Lease

The Security Deposit and the Lease

Posted on 09. Sep, 2011 by in Business

When Brenda received her security deposit refund back after moving, she was surprised to see a charge for $225.00 for lawn and garden maintenance deducted from her check.

Puzzled, she called the property management office, where staff informed her that since she had been renting a house, she was responsible for the rose bushes that had died in the back yard and would need to be replaced.

The only problem is that lawn and garden upkeep had never been written into her lease, so Brenda had no idea that she was responsible for any plants, trees, or shrubs that died during the term of her lease.

While many can argue that it would seem apparent that Brenda would be responsible for anything on the property that was damaged or destroyed, it doesn’t matter. It wasn’t written in the lease. After several phone calls and threatening to take the property management company to small claims court, Brenda received a refund for $225.00.

So how can you prevent this from happening to your company?

  • Don’t use a “one-size-fits-all” lease. An apartment lease can differ greatly from a home lease. While tenants in an apartment complex are not responsible for the upkeep of common areas, home renters are normally responsible for upkeep on the entire property, including lawn mowing, routine cleaning, and rose bushes. This must be written into the lease.
  • Make sure that the tenant is aware of what they are responsible for prior to signing the lease.  Unfortunately, it’s rare that a tenant reads the entire lease prior to signing, so make sure to take the time to explain exactly what they are responsible for.
  • Consider charging a non-refundable cleaning deposit. Most property management companies do not charge for routine cleaning, but those that handle rental homes often do not have the staff or the funds to perform this without charging the tenant. If you institute a cleaning fee, the cost of the routine cleaning would be covered, and you would only have to worry about deducting actual damages from a security deposit.
  • Make the amount of your security deposit consistent with the type of property being rented. Many managers of large apartment complexes routinely slash security deposits to attract renters, only to find themselves in a hole when that tenant moves out and the security deposit doesn’t come close to covering the damages. Collecting on additional damages after move-out is time consuming, costly, and successful only about 50% of the time.

Making sure your security deposits and your lease detail match can save you time and headaches, both now and in the future.

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