Wednesday, 3 May 2017

Important Security Deposit Tips for Landlords

After the amount of work that goes into a home, done by landlords and the preparation that makes a home what it is, collecting a security deposit may seem like the easiest task. There are some rules all landlords would do well to follow when they need to take a security deposit, so the following tips will give you more information on the subject so you can avoid any mistakes along the way:

Tips on handling rent

 There are a few rules you need to follow when you collect rent, but you would do well to treat the process of rent collection with a good amount of care, as any conflicts may cause a legal dispute you really don’t need. Make sure you are clear about the amount of rent due, as well as the involved method of payment.  If there are any changes in terms, you will need to make sure your tenants know as soon as possible and in writing. You would also do well to provide a receipt for everything you need to do. Some cities or states may require you to do that by law anyway, but you should still do it to have a solid paper trail of any transactions you’ve had with your tenants. Even a simple e-mail to point out you have received the rent will be a good way of communicating, but a receipt will have far more pull, as it will show the date of the rent, the amount you received and the personal details of the tenant, such as unit number, name of the tenant and the dates that were covered by them.

Dealing with security deposits

Handling actual security deposits will be a bit of a different task, compared to the previous example. The state or city may actually require you to keep the security deposit as a separate from the money you have and to deposit them in a different, interest-bearing account instead. The reason for this is that despite the fact that the money may be in the possession of the Landlord, it still technically remains the property of the tenant. Furniture marks and a relatively reasonable amount of damage to the carpet, warped doors due to the age of the wood, dents from door handles, and replacements for smoke detector batteries and so forth are all a valid reason to use the deposit if the need really arises.

The rules for returning the security deposit vary by state. Some states require landlords to list any repairs made with the security deposit along with their cost. Many states have deadlines, by which the security deposit must be returned, so don't delay making repairs when the tenant moves out. If you want to collect the rent from last month instead of a security deposit, then you can use the money as the last rent, opposed to actually using it to pay for any possible repairs on the unit itself in the end. After the end of a tenancy, you will likely need to deal with carpet cleaning, upholstery cleaning, kitchen cleaning and all manner of end of tenancy cleaning. When that is done, the property will be ready for new tenants.

For more end of tenancy or carpet cleaning tips: click here.