Most rental agreements involve a security deposit, which is a payment (usually calculated based on a number of months of standard rent) to the landlord to hold in trust (i.e. temporarily) until the rental agreement expires to protect the landlord from a renters failure to pay or damage to the property. The amount of the security deposit can vary. It is usually based on the credit risk of the renter (i.e. your credit history) and the value of the property (if a dwelling has high-end finishes, such as new carpet, expensive landscaping, marble tile, etc.), though other variables come in to play as well (number of tenants, pets, etc.).
However, the risk isn’t only with the landlord. Renters bear risk as well, since the deposit may not always be recovered or recovered in full. While most landlords are fair and reasonable when it comes to returning the security deposit, some are not. Some landlords view the deposit as a final “payment” or they deem normal “wear and tear” (which is legally expected, and the landlords are compensated for this as part of the monthly rental payment) as more than that, keeping the security deposit to pay for replacing or repairing used items. Renters should discuss this with the landlord at the inception of the lease, to make sure this is explicitly stated. By communicating your knowledge of the fact that normal wear and tear is part of the rental payment (not the security deposit), you are communicating to the landlord that you are aware of your rights, which will reduce the likelihood that a landlord withholds payments unjustly. Security deposits can also be negotiated. A landlord may ask for three months rent, but may be willing to take two months rent. It doesn’t hurt to ask.
Standard practice with security deposits is that you will return the property in the condition that you rented it (less normal wear and tear). In other words, the security deposit will be returned, less the value of any amount needed for repairs. Damage beyond normal wear and tear is considered a loss, which can consume some of the security deposit. However, the life of a product should be factored in to the calculation of loss related to an asset. For instance, you wouldn’t expect that the loss of an eight year-old carpet to result in a charge for brand new carpet. The property to be replaced needs to be decremented by the loss associated with normal use over the life of the item.
Before handing over a security deposit, you should perform a walk-through of the property with the landlord (or their rental agent) to identify existing damage to the property. There are several things that are important to do when you perform the initial walk-through with the landlord. If the landlord does not provide one, you will want to buy a property check list at an office supply store or print one from the internet. This list will display all of the categories you will want to inspect and report any existing damage in the presence of the landlord. You will also sign each area to verify that it contains all current damage. Be sure to err on the side of caution during the inspection to identify all possible property damage. Don’t just list the big items, note small details as well. This will serve yo well when at the end of the rental agreement to get the most back on your deposit. You don’t want to end up paying for damage that was already there, but that you didn’t notice (or make official note of).
Another important practice is to take pictures. Make sure you know how to focus your camera and that there is adequate light to see all areas that you are photographing. Be sure to take close up pictures of any and all damage and be sure that the megapixel setting is high enough to show very good detail. This is important because these pictures and the documentation will be proof of existing damage that you will not be required to pay for out of the deposit.
Another important tip is to make sure you give the rental property a thorough cleaning before the final walk through. Patch any damage from hanging pictures, clean everywhere, or hire a good cleaning service. Odds are that if you are not a good cleaner, you may get more deposit back by hiring an affordable, reputable cleaning service. Be sure to figure out the costs, but if possible, try to do a good job cleaning the rental property yourself. It is easier to keep a rental property clean each week rather than to tackle a gigantic cleaning project at the end of years of living in the property.
One final tip is to make sure that you are on good terms with your landlord throughout your tenancy. Pay your rent on time, don’t cause unnecessary problems for the landlord and be friendly. This will not affect the amount you get back if you still end up trashing the property, but it may cause the landlord to look upon any mild damage with a softer eye, which will save you more money in the long run.
Lastly, know your State’s tenant laws so that if you find yourself the subject of unfair or illegal practices, you are able to identify them and react. Most States make it fairly easy for tenants to pursue legal recourse when security deposits are unjustly retained. Just knowing your rights and discussing them with the landlord may be enough to get them to see things in a different light.
Most rental agreements involve a security deposit, which is a payment (usually calculated based on a number of months of standard rent) to the landlord to hold in trust (i.e. temporarily) until the rental agreement expires to protect the landlord from a renters failure to pay or damage to the property. The amount of the security deposit can vary. It is usually based on the credit risk of the renter (i.e. your credit history) and the value of the property (if a dwelling has high-end finishes, such as new carpet, expensive landscaping, marble tile, etc.), though other variables come in to play as well (number of tenants, pets, etc.).
However, the risk isn’t only with the landlord. Renters bear risk as well, since the deposit may not always be recovered or recovered in full. While most landlords are fair and reasonable when it comes to returning the security deposit, some are not. Some landlords view the deposit as a final “payment” or they deem normal “wear and tear” (which is legally expected, and the landlords are compensated for this as part of the monthly rental payment) as more than that, keeping the security deposit to pay for replacing or repairing used items. Renters should discuss this with the landlord at the inception of the lease, to make sure this is explicitly stated. By communicating your knowledge of the fact that normal wear and tear is part of the rental payment (not the security deposit), you are communicating to the landlord that you are aware of your rights, which will reduce the likelihood that a landlord withholds payments unjustly. Security deposits can also be negotiated. A landlord may ask for three months rent, but may be willing to take two months rent. It doesn’t hurt to ask.
Standard practice with security deposits is that you will return the property in the condition that you rented it (less normal wear and tear). In other words, the security deposit will be returned, less the value of any amount needed for repairs. Damage beyond normal wear and tear is considered a loss, which can consume some of the security deposit. However, the life of a product should be factored in to the calculation of loss related to an asset. For instance, you wouldn’t expect that the loss of an eight year-old carpet to result in a charge for brand new carpet. The property to be replaced needs to be decremented by the loss associated with normal use over the life of the item.
Before handing over a security deposit, you should perform a walk-through of the property with the landlord (or their rental agent) to identify existing damage to the property. There are several things that are important to do when you perform the initial walk-through with the landlord. If the landlord does not provide one, you will want to buy a property check list at an office supply store or print one from the internet. This list will display all of the categories you will want to inspect and report any existing damage in the presence of the landlord. You will also sign each area to verify that it contains all current damage. Be sure to err on the side of caution during the inspection to identify all possible property damage. Don’t just list the big items, note small details as well. This will serve yo well when at the end of the rental agreement to get the most back on your deposit. You don’t want to end up paying for damage that was already there, but that you didn’t notice (or make official note of).
Another important practice is to take pictures. Make sure you know how to focus your camera and that there is adequate light to see all areas that you are photographing. Be sure to take close up pictures of any and all damage and be sure that the megapixel setting is high enough to show very good detail. This is important because these pictures and the documentation will be proof of existing damage that you will not be required to pay for out of the deposit.
Another important tip is to make sure you give the rental property a thorough cleaning before the final walk through. Patch any damage from hanging pictures, clean everywhere, or hire a good cleaning service. Odds are that if you are not a good cleaner, you may get more deposit back by hiring an affordable, reputable cleaning service. Be sure to figure out the costs, but if possible, try to do a good job cleaning the rental property yourself. It is easier to keep a rental property clean each week rather than to tackle a gigantic cleaning project at the end of years of living in the property.
One final tip is to make sure that you are on good terms with your landlord throughout your tenancy. Pay your rent on time, don’t cause unnecessary problems for the landlord and be friendly. This will not affect the amount you get back if you still end up trashing the property, but it may cause the landlord to look upon any mild damage with a softer eye, which will save you more money in the long run.
Lastly, know your State’s tenant laws so that if you find yourself the subject of unfair or illegal practices, you are able to identify them and react. Most States make it fairly easy for tenants to pursue legal recourse when security deposits are unjustly retained. Just knowing your rights and discussing them with the landlord may be enough to get them to see things in a different light.
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