Tenant Move-Out Issues
Return of the tenant’s security deposit and the accounting for amounts retained by the landlord can often be a source of dispute between the landlord and the tenant upon the tenant’s move-out. A tenant expects to have his full security deposit returned. The landlord may find the condition of the unit requires deductions for cleaning and repairs. The discussion that ensues can leave either party dissatisfied, disgruntled, or ready to take legal action.
To help avoid disputes, there are certain steps that can be taken by the landlord to help the tenant understand tenant duties and obligations at the expiration of the lease term. Tenant compliance with lease terms and conditions at end-of-term can help in minimizing deductions from the tenant’s security deposit. Of course the tenant’s good care of the rental property during his tenancy is also a factor in the final inspection report and determination of applicable deductions from the security deposit.
By requiring tenants to provide written notice of intent to vacate as specified in the lease agreement, a landlord can begin preparations for the upcoming vacancy. Additionally the notice provides the landlord the opportunity to communicate to the tenant detailed instructions for the move-out. A tenant by following the move-out instructions can help protect the refund of his security deposit from unnecessary deductions.
After receipt of the tenant’s notice to vacate, the landlord should confirm the tenant’s stated departure date in a move-out letter. In the letter the landlord can review the lease terms and conditions for tenant move-out. It is expected the rental unit will be left in the same condition as it was at time of move-in except for ordinary wear and tear. A signed copy of the move-in inspection and checklist should be attached to the letter to serve as reference for cleaning and housekeeping duties. The move-out inspection will use that same checklist to note the condition of the unit at time of move-out. By providing the inspection and checklist, the landlord provides the tenant with yet another opportunity to help protect the return of his full deposit.
In the move-out letter, a landlord can remind the tenant of other duties and procedures that are part of the move-out process. As examples, the move-out letter might contain:
- A summary discussion of the move-out inspection procedures. This should include a reminder that all personal possessions must be removed from the premises prior to inspection.
- A reminder that the lease agreement prohibits using the security deposit as the last month’s rent.
- A reminder that the lease agreement gives the landlord and the landlord’s agents the right to show the unit to prospective tenants or to schedule contractor work upon reasonable notice per statute.
- A statement of the landlord’s expectations that the unit will be cleaned and left in the same condition as the tenant found upon moving in.
- An instruction regarding date and time of the move-out inspection.
- An instruction for return of keys, garage door openers, gate keys, and pool pass, as appropriate to the rental unit.
- An explanation of how the security deposit refund will be handled including reference to the applicable state law for accounting and return of the deposit.
- A request to the tenant to provide a forwarding address and contact information for future communications and for mailing of the check for the portion of the security deposit being returned and an accounting of any amount not being returned.
- An itemized list with instructions on how to meet the landlord’s cleaning standards and what items on the move-in checklist are the items of priority.
A detailed move-out letter can set the stage for a satisfactory final inspection. With adequate instruction and information, the tenant should clearly understand his duties and the landlord’s expectations. Performance of those duties according to landlord standards should minimize the chance that a deduction for cleaning costs would be taken from the tenant’s security deposit.
The final inspection should take place after the tenant has removed all personal possessions from the unit and the tenant has notified the landlord that the unit has been cleaned to the level of cleanliness that the tenant intends. A vacant unit will reveal any damage to the unit caused by the tenant during occupancy or removal of personal possessions from the unit.
The documented move-in inspection report is the basis for the move-out inspection. The move-out inspection cannot be more restrictive than was the move-in inspection. Some states have special rules and requirement for move-out inspections and use of checklists. In a few states the tenant must be provided a pre-move-out inspection. The landlord will note property defects that the tenant needs to correct if the tenant wants to maximize his deposit refund.
Some landlords conduct the final inspection of the unit on their own and only send an itemized statement and deposit balance to the tenant. In a few states the landlord is required to conduct the final inspection of the rental unit with the tenant being present. This may be a better practice overall to allow the tenant to observe and ask questions regarding potential deductions from the deposit. The tenant should be allowed to give his side of the story before a deduction is made. A joint inspection can avoid the potential unpleasantness of surprising a tenant who anticipated receiving his full deposit back. Inspections should always be documented in writing with photos or video taken to support the condition of the unit at move-out.
Some tenants may ask for a chance to do additional cleaning or repair damage before the final itemization of the security deposit. In a few states a landlord is required to offer the tenant a second chance at cleaning before cleaning costs are deducted from the security deposit. As a goodwill gesture, a landlord may consider offering a tenant a second chance, particularly if there are mitigating circumstances, they have been good tenants and the landlord can expect them to perform to standards. A landlord should be cautious in allowing a tenant to repair damages to the unit. There is potential liability to the landlord for future claims if a new tenant suffers injury or damage as a result of poor or defective repair work by the vacating tenant.
The procedures for the handling, accounting, and return of security deposits vary by state. Due diligence is required for the specific state requirements but in general, a landlord will be allowed to take deductions from a tenant’s security deposit for cleaning costs outside of normal wear and tear, repair costs for damages to the property, and unpaid rent.
The time allowed by statute that the landlord has to return the security deposit can range from a “reasonable time” to a maximum of 60 days. Statutes further require a landlord to itemize and return the deposit within the specified timeframe.
Many deposit disputes between landlord and tenants occur over costs for cleaning and repairs. Generally a landlord can charge for cleaning and repairs necessary to restore the rental unit to the move-in condition. A landlord cannot deduct for costs of ordinary wear and tear. The costs must be a reasonable and fair price for the type and amount of work performed.
A landlord cannot charge the tenant for damage that was present at move-in, replacing an item when a repair would be sufficient, or cleaning when tenant paid a non-refundable cleaning fee. If repairs or cleaning cannot be performed within the time required by statute to return the security deposit, a reasonable estimate of costs can be made. When work is performed, the receipts must be for an amount at least as much as the amount deducted.
A reasonable approach for the dollar amount on damages is to determine whether the tenant has shortened the useful life of an item that will wear out. If the tenant has damaged or shortened the item’s useful life, the landlord may charge the tenant for the prorated cost of the item based upon cost of the item, the expected useful life, and replacement cost.