Resident Security Deposits-Are You Covered?

Resident Security Deposits – Are You Covered?
Posted: 08 Apr 2010 07:00 AM PDT
When Judy moved out of her apartment, the property managers at one of New Mexico’s top management companies were mortified by the extent of damages. The front door was covered in dents, and windows were broken in both the bedroom and the living room. The carpet was covered in cigarette burns and ugly purple stains, and the bathroom tile was curled up and peeling from excessive water damage.
The only consolation was that the management company had a significant security deposit on hand that could be used toward the damages. Yet, within two months, Judy received her security deposit back, with interest, leaving the management company responsible for the tab.
Why?
Because management personnel made a costly error. They failed to provide Judy with an itemized statement of damages, a process required by state law. In fact, they didn’t send Judy anything at all. They simply kept her security deposit.
How can you make sure that your company avoids this common error, and doesn’t end up paying out of pocket for extensive damages?
 Note that most states require property management companies return tenant security deposits or provide former residents with an itemized statement of damages within 30 days of the date of vacancy.
 Know your state’s specific statutes. States such as Nevada and New Mexico use the 30-day rule, while Florida requires property management companies to mail security deposits within 15 days of vacancy, and provide an itemized billing statement for any damages within 30 days of vacancy. California currently allows 21 days for refunds or statement receipt, and Indiana allows 45 days for refunds and statements.
 Don’t assume your former residents don’t know the state statutes. Anyone with an Internet connection can easily locate this information. It’s vital that you know it as well.
 Be sure to provide an itemized list of damages. A generic bill for $400.00 is not sufficient. State statutes generally require property management companies to detail each charge that is applied against a tenant’s security deposit. Some states, such as California, also require receipts to be included with the statement. Again, learn your state’s statutes and abide by them.
Although careful tenant screening can often prevent excessive property damages, it’s important to not let simple mistakes prove costly to your company. Know the statutes, abide by them on a timely basis, and you’ll be able to retain the funds that are rightfully yours.