One of the most stressful components of a property manager’s job is the possibility of having to appear in court against a tenant or owner. Since the majority of tenant-landlord disputes are arguments over the landlord withholding the security deposit, this blog post will focus on what type of evidence you need to collect in preparation. (For much more information on security deposits, see Security Deposit Tips for Property Managers, Landlords, and Tenants.)
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Typically, the disagreement arises when tenants and landlords disagree on:
Whether the tenant is responsible for damages or untidiness in the property
Whether the repair and/or cleaning costs quoted by the landlord, and thus the amount withheld in the security deposit, are reasonable
If the two parties cannot resolve the issue on their own, the tenant will sue the landlord for the withheld funds and leave it up to the small claims court to determine a winner.
What to Bring to Court for a Security Deposit Dispute
Once a tenant has filed a case against you, you should take measures to defend yourself. Gather all the evidence you have that shows the property needed cleaning or is damaged, and understand that you have the legal burden to prove these facts. In other words, if you don’t have sufficient evidence of damage or untidiness, all the tenant needs to win against you is proof of residence, proof of security deposit payment, and proof of the fact you didn’t return the entire deposit. I’ve included below a list of things that can help your case—try to gather as much of it as you can manage:
A “move-in” inspection report, filled out prior to or on the day the tenant moved in
A checklist or inventory sheet that documents the condition of the rental unit, noting every room and amenity on whether it is functioning vs. damaged and clean vs. dirty
Photos that document the conditions of every room and most amenities, particularly where damage exists. Some property managers prefer to also film the unit, but certain small claims courts do not allow the showing of videos, so only photos will be considered as evidence
Signatures from the inspector and the tenant to show that both parties agree on the assessments
Some states require that landlords offer a “pre-move-out” inspection prior to the move-out date. Otherwise, the deposit cannot be withheld (more on this later). If that is the case for you, make sure to bring such an inspection report
A “move-out” inspection report, filled out after the day the tenants moved out, which contains the same items as the “move-in” inspection report
A copy of the itemized notice you sent to the tenant after the pre-move-out inspection, and the one after the move-out inspection, on the items they will be charged for
An itemized list of the hours spent by your staff on repairing and cleaning the unit, accompanied by the hourly costs of the work. Attach the original invoices for professional cleaning and repair services
A copy of the original lease/rental agreement, signed by the tenant
Any damaged item that can be brought in (e.g., a curtain with a cigarette hole)
1-2 witnesses who can attest to the unit’s condition after the tenants moved out, such as the cleaning or repair staff, or even the new tenant if they saw the property before you cleaned it. The evidence is strongest if the witnesses can testify live in court; but the alternative is to provide a written affidavit containing the following information:
I, ________[witness’ full name], declare:
I am employed at _________ [company name], located at _________ [company address]. We provide _______ [nature of the professional service] service for ________ [your full name] who manages the rental unit at ________ [rental unit address].
On __/__/_____, I was hired to perform ________ [nature of the professional service] on the rental unit at _______ [rental unit address].
I noticed such untidiness/damage:
The likely cause of the untidiness/damage is:
The cleaning/repair required is:
I declare under penalty of perjury under the law of the State of ______ [your state] that the foregoing is true and correct.
Printed Name: _____________
For more information on how to defend yourself against a tenant in your specific state, check out Nolo’s Collecting and Returning Security Deposits (go to the bottom, where all the states are listed).
How to Prevent Security Deposit Disputes
As the saying goes, prevention is better than the cure. The best way to protect yourself is to always follow landlord-tenant laws scrupulously in the first place. Some of the common missteps to look out for are:
What is your state’s maximum security deposit that you can ask for upon move-in?
What are your state’s rules on the number of days you have to return security deposits after the tenants have moved out? (For most states, it’s 14-30 days; and if you miss the deadline, the tenant is entitled to receive their deposit in full.)
Does your state require that you offer tenants the option of a pre-move-out inspection? (This is intended to protect tenants by giving them early notice on damages or untidiness they are responsible for, and have time to remedy them. If you didn’t offer this option, you might not be eligible to deduct from the security deposit.)
After performing a move-out inspection, did you send the tenant a list of deductions from the security deposit due to cleaning or repairs? (You must do this within the deadline for returning a tenant’s remaining security deposit.)
Did you keep the receipts/invoices of all the cleaning and repairs you performed on the unit after the tenant moved out?
The key lesson here is to keep records of all pertinent information and maintain a paper trail of all of your interactions with the tenant, because these are the key pieces of evidence that will hold up in court. Nolo has a great resource that lists each state’s rules surrounding security deposits.Read more on Legal Considerations