A landlord who is too trusting of their tenants is a landlord that loses money.
When you find a tenant to fill a vacancy in your rental property, you always want to get started on the right foot. So long as you've got a rigorous tenant screening process, there's no reason to think that the person might damage your property or break the lease early.
The thing is, however, you can never be too safe. You need security deposits to safeguard against potentially delinquent tenants.
Today, we're going to tell you 4 facts Fairfield landlords need to know about security deposits. Don't leave yourself vulnerable-keep reading and learn everything there is to know about security deposits.
1. What Are Security Deposits?
When you collect a security deposit, you're doing so to protect against delinquent behavior on the part of your tenant. You can only withhold the security deposit to cover specific expenses, however.
Unpaid rent is a common reason to keep a security deposit. If a tenant leaves early and breaks the lease, you're entitled to withhold the equivalent of rent or late payment fees.
It also covers cleaning or damage to the rental. You must prove that cleaning was necessary to restore the unit to the way it was pre-tenancy. When it comes to damage, you'll have to prove that the damage incurred goes beyond the realm of normal wear and tear for a rental unit.
2. Security Deposit Amount
A lot of landlords wonder how much they can ask for a security deposit. While you're allowed to collect a security deposit worth two months' rent (or 3 months' rent for a furnished apartment), most landlords do a single month.
In fact, there's a new bill under review that could change this law so that landlords can only collect one month's rent.
3. Collecting Security Deposits
Conducting move-in/move-out inspections is essential for determining rental property damage. During the move-in inspection, you'll walk through the unit with the tenant, making note of any existing damage. When you move out, you'll do the same inspection to find out if there's any serious damage.
Damage includes anything that needs to be repaired or replaced. Holes in the wall, burns in the carpet, and pet stains all qualify as damage.
4. Trouble With Security Deposit Collection
Your tenant isn't always going to take kindly to you withholding some or all of the security deposit. If they disagree with the reasoning behind you keeping the money, they may take you to court.
You can easily win your court case if you're careful about documenting the damage and recording correspondence between yourself and the tenant. That said, it doesn't hurt to have an experienced real estate lawyer around to help you navigate the court process.
Security Deposits and Property Management
Security deposits are an important part of doing business for Fairfield landlords. If the idea of collecting and withholding security deposits doesn't sit well with you, hiring a property management company is probably the right move.
At PMI, we're one of the nation's top full-service property management companies. Our thorough tenant screening services will ensure you only get top candidates in your rentals, but we can also handle things like security deposits and evictions on your behalf. Contact us to learn more about our services.