Though it is often not included in the rental advertisement, you can expect to pay a security deposit over and above the monthly rent. This is normally required before move-in and can be as low as a few hundred dollars in a large older apartment community or as high as being equal to a month’s rent when considering the rental of a home or condo. Understanding this process helps you protect your deposit in the future.
Rent is the largest household expense you have every month. Additional costs connected with renting an apartment, condo or house such as security deposits are financial obligations that need your attention and protection.
What’s important to keep in mind is that a security deposit is not rent and should be kept separate from rent. This doesn’t mean that it can’t be used to pay for past due rent, cost of resident damages upon move-out and/or other outstanding fees called for by the lease agreement. It is to be held as additional security to ensure that the terms of the lease are met. It is the renter’s money until it is determined necessary as one recourse to fulfill the terms of the lease. We make the determination carefully for the protection of both our tenant and our owner. If we make that determination, we notify the tenant giving them an accounting of what we did and why whether during the lease period or after move-out. In the interim, we maintain security deposits separate from each property’s operating funds.
Using the above standard for the proper way to collect, maintain and account for security deposits; here are some red flags:
• Your security deposit is collected with the rent by the owner and not separately held.
• If the rental property is sold or taken back by a mortgage lender, you have the right to know where your deposit is.
• You should be concerned if your security deposit is being used to pay delinquent taxes, mortgage payments or repairs necessary to make the rental ready to move into.
• If you have moved and there has been no written accounting for what has happened to your security deposit, please know that there are required procedures and deadlines to accomplish this accounting.
Rental customers as well as rental owners are more concerned than ever that financial decisions are fair and their interests are protected. Owners often feel that any costs necessary to re-rent the home should be taken out of the security deposit, while the moving renter feels that they have fulfilled the terms of the lease and need the return of their security deposit to move into their next rental home.
Here are some pro-active measures that can be used to manage expectations, require accountability and protect your deposit:
• Require that a formal move-in and move-out process take place with a detailed inspection of the premises prior to move-in.
• This inspection should be documented with a form that outlines in detail the condition of the rental at the time of move-in. If there are items to be repaired the details of what, how and when these items will be resolved should be included. Details of conditions that are noted, but will not be changed are included as well. This form is accepted by signature from all parties.
• Upon notice to vacate; a preliminary inspection should be conducted to create realistic expectations by all parties at the time of move-out.
• Upon move-out the previous documented move-in/move-out checklist is pulled out as a reference and the same detailed inspection takes place.
Within 3 weeks (21 days) of move-out, you should expect a full accounting of your security deposit. If you think this accounting reveals some errors or is different form your expectations, ask in writing for a meeting to discuss with the hope of a fairer outcome.