Even tenants who are carefully screened can leave behind property damage when the lease ends and they vacate your San Diego rental property. You’ll need to document the damage, repair it, and then deduct the cost from the tenant’s security deposit.
This isn’t always as easy as it sounds.
Tenant disputes are likely to erupt when you withhold security deposit funds, especially when it comes to parsing the difference between tenant damage and wear and tear.
Here’s what you should do.
San Diego Rental Inspections Must be on Point
Good documentation will help you effectively withhold money from a tenant’s security deposit when there’s damage to your rental property.
The move-in inspection report should detail exactly how the home looked before your tenant took possession. Take hundreds of pictures. Photograph everything, including the doors and windows, the ceilings, the floors, the closets, and every appliance. You want irrefutable proof that everything was in excellent shape when your tenants moved in.
The move-out inspection report needs just as much detail. Take photos that will show the difference in property condition before and after the lease period. Document the damage clearly.
Offer Tenants an Early Inspection
Always offer your tenants a pre-move out inspection. They do not always accept this offer, but it’s an opportunity to get inside the property before they leave so you know what you’re dealing with. You’ll also be able to point out any damage for which they’ll be responsible.
Identify and Repair the Damage to Your Property
When you are dealing with tenant damage, you’ll need to make the repairs and then charge the cost of those repairs to your tenant’s deposit. This will require a collection of all estimates, invoices, and repair bills.
You cannot make a vague or general charge against the deposit for damage. It has to correspond to what you’ve spent to repair it.
Security deposits must be returned within 21 days in California. Depending on the amount of damage to your property, you might be keeping all of the deposit or some of it. Return anything that’s left to the tenant, and include a letter that details what was withheld and why. Include your receipts.
If the work is not completed within those 21 days, send your estimates. You can deduct a good faith estimate of the deduction amount. Send the estimated accounting and then the finalized bill with any necessary adjustments within 14 days of when the repair is complete.
Do not wait beyond the 21 days to return the security deposit and/or the disposition letter. Otherwise, your tenant can sue you and you won’t be able to make any claims against the security deposit.
When Damage Exceeds the Security Deposit
In the unlikely event that the amount of damage you find at your property exceeds the amount of the security deposit, you’ll need to send all the same documentation to explain why the tenant is not receiving any of that money back. You’ll also want to include a bill that outlines the outstanding charges. Instruct your tenants on how to pay you and in what timeframe.
It’s going to be difficult to collect that outstanding balance from your tenants, unless they are willing to pay it. You can hire an attorney or put forth your best collection efforts, but a lot of effort will be involved in collecting what is due.
Avoid your security deposit and damage nightmares by working with a San Diego property management company. We have systems in place to reduce the risk of property damage, and we know the security deposit laws to the letter. Contact our team at Mercer Properties.