DON’T LET THE TENANT CLEAN YOU OUT OF THE CLEANING DEPOSIT  

© Copyright  2000-2011  Landlord.com

Many times a tenant, who may be moving out or is short on cash, may get the notion to deduct the amount of his security deposit (including cleaning or any other refundable deposit) from his current rent or from his last month's rental obligation. (The latter is more common because most tenants do not have the “chutzpa” to do it during their tenancy because they are afraid of an eviction lawsuit). When it does occur, it usually happens at the last minute, when the tenant is ready to move out. Until you conduct your intensive collection process, you might mistake the situation for a delinquency. When the tenant is forced to pay, he'll usually drop the check (for the amount of rent less the deposit) into the manager's mailbox. He'll try to operate as secretly as possible. 

Deducting Deposit from Current Rent – Call the Tenant’s Bluff

When a tenant deducts the deposit amount from current rent, he's really challenging the landlord and his grit for rent collection enforcement. This represents another simple collection test. If he's not moving out and deducting his deposit, he is probably doing this because he is very financially strapped and imagines and rationalizes that his deposit is “his” money, so why not use it now. He has misunderstood the purpose of the deposit, i.e., security for the performance of his rental agreement. It isn't money that the landlord has tucked away in case of a tenant emergency. Under no circumstances should you as the landlord accept any attempt by the tenant to deduct the deposit from the current rent due. The deposit is not to be used for rent during the term of the tenancy. Period. Its purpose, as set forth in the rental agreement, is not changeable at the tenant's convenience. Go ahead and collect the full amount or balance of the rent due or initiate eviction proceedings in court. 

Deducting Deposit from Last Months Rent – How to Outsmart Your Tenant

If a tenant has given notice that he is moving out within or at the end of 30 days, the situation is different. You may think you no longer have the lever or “threat” of eviction process. In the case of the tenant who is not moving and attempts to deduct his deposit from his last months rent, you may still use the eviction process to politely convince him it lies in his best interest to pay. He has something to lose. His credit rating, landlord reference, to name a few. However, when a tenant is on the verge of moving and he doesn’t care about his credit or references the threat of eviction has little effect. A different approach is necessary in this latter case. A tenant, who gives notice and then deducts the amount of his deposit from his last month's rental obligation, generally does it for one of two reasons. One, he may desperately need the money for a new landlord, or two, he basically does not trust you to be fair and in returning his security deposit, so he gives himself the credit and waits for you to do or not do something.  You may initiate an eviction action to include money damages, or choose the less expensive procedure of small claims court action for only the money balance due. Such action is highly recommended if the tenant will move out, seems to think he's pulling a fast one on the landlord and if you think there will be substantial apartment damage that the security deposit amount will not cover. However, if the tenant fears losing his deposit to unfair cleaning, repairing and replacement charges, you must convince him that he will be given fair treatment and that you have a well-defined deposit refund policy. Other renters are usually the source of the tenant's suspicion. They pass on stories of raw deals they got when they moved out of the premises. Or the present tenant may have had some first hand experience in which the situation was handled unfairly. You must, overcome his suspicion if you are going to collect the rent. Carefully explain the deposit refund policy and assure the tenant that if no unreasonable damages exist, he is entitled to a full or substantial refund. 

Pre-Inspection a Must 

You should also explain that it would be necessary to make a preliminary inspection of his unit, so that you both can get an idea of the extent of cleanliness or any damage. It's difficult, if not impossible, to completely inspect the tenant's apartment while he is still in occupancy and while his furniture and other personal possessions are in place. He may try to cover up damages to the unit. His cover-up won't work, however, if you've properly established the condition of the unit and inventoried its contents before the tenant moved in (Landlord.com's Apartment Inspection Form). If so, with a proper inspection in hand, you and the tenant together can generally determine which items are chargeable against the deposit and which are not. While the tenant's furniture and other possessions are within the unit, you can only make a general inspection. However, you'll get a fairly good idea of the condition and contents of the premises. If the tenant is keeping a clean and neat household with no extraordinary damage visible, assure him that from this first inspection, you expect to give most or all of his deposit back. Assure him of your sincerity and then request him to pay his rent. If he's convinced, you'll collect the rent. After he moves out, make another personal inspection of the premises, making note of any damages exceeding ordinary wear and tear. Have an eye for detail and do a thorough inspection. Then prepare an accounting statement (Landlord.com's Apartment Inspection Form) indicating any charges, (labeling each), credits and enclose the appropriate refund check. (Accountability, applicable charges, period of time to notify and/or refund of deposit must be made within your own state law.)

Conclusion

When confronted with a sticky situation, such as the ones described above, any tenant who attempts to deduct his deposit from rent due should no longer anger or bother you. Now you are equipped with the knowledge of how to handle just about any situation and at the same time you’ll stand your best chance of collecting what's due you, the rent.

Other Related Articles; 

"THE SECURITY DEPOSIT:  USING IT, ACCOUNTING FOR IT, AND DEFENDING IT IN SMALL CLAIMS COURT-Part I," Part II," Part III"

"Ethical Use of the Tenant Holding Deposit"

"Six Keys to a Successful Security Deposit Policy"

 

Back To Alphabetical  Back To Category