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A Landlord Nightmare: When the Security Deposit Won’t Cover the Damage


Aug 07, 2020 by Aly J. Yale

Requiring a security deposit is always a smart move. But sometimes, even that's not enough to protect yourself from financial loss. If the tenant is particularly negligent (or their pet or kid causes significant damage), there's a chance that security deposit won't foot the full repair bill.

When that happens, you have options. But the truth is, there's still a chance you'll end up covering those repairs out-of-pocket.

Are you dealing with excess damages from a neglectful tenant? Not sure how to move forward? Here's what you should do:

Add up all the damages and send an itemized list to the tenant

Your first step is to put together a detailed list of everything that was damaged and how much each item will cost to repair. Show this amount being deducted from their total security deposit, and call out at the bottom the remaining balance.

It should look something like this:

DATE

TENANT NAME

NEW TENANT ADDRESS

Re: Security Deposit Deductions for 123 First St.

  • Broken blinds: $200
  • Chipped tile: $150
  • Steam cleaning fee: $350
  • Holes in walls (3x): $250
  • Burned carpet: $200

Total: $1,150

Security deposit held for damages: $750

Remaining damage balance: $400

Include a demand letter detailing how much the tenant owes you

You'll also want to include a demand letter along with your damage report. This should be personalized and addressed directly to them, and it should explain the excess damage charges and how the tenant can settle those up.

You should also include the consequences of nonpayment as well as a number to reach you at should they have questions or concerns. You may also consider including the name and number for your attorney (if you have one).

A demand letter might look something like this:

DATE

TENANT NAME

NEW TENANT ADDRESS

Re: Excess Damages at 123 First St.

Dear TENANT NAME,

This letter is to inform you that your security deposit of XX will not be returned. The deposit will be used to cover the following damages to the property located at XX.

INSERT ITEMIZED LIST

The total cost for all damages incurred during your lease period is XX. This exceeds your total security deposit amount by XX. Please remit payment for this overage amount at the address below by DATE.

YOUR NAME

YOUR ADDRESS

Please keep in mind that disregarding this bill could result in liability. Should you have any questions or concerns, reach out to me at PHONE or EMAIL or to my attorney at PHONE or EMAIL.

Thank you,

YOUR NAME

SIGNATURE

Consider small claims court or a collections agency

If the tenant doesn't respond by your deadline, you have a choice to make. First, you can certainly take them to small claims court. As long as you have documented evidence of the damage as well as the home's previous condition, you'll probably have a good chance of winning.

The question is whether the damages are worth the time and cost it would take to go to court. Filing a claim usually costs anywhere from $30 to $100. It will also take a good amount of effort. You'll need to gather evidence, build your case, and attend hearings, and if the tenant only owes you a few hundred dollars, it might not be worth the work.

Similarly, you can also enlist a collections agency, but again, these also come with fees. You'll want to weigh whether the excess damages are enough to warrant the fee of calling in a pro.

Moving forward

As with most things, the best defense is a good offense, so use this as a lesson moving forward. Ask for a higher security deposit, do regular property inspections, and be extra careful when screening tenants. Always follow up with past landlords to make sure a tenant left the property in good condition. If they didn't? Run for the hills.

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