Security Deposit - Rekeying fee and Layers feed

[cmroze]

Happy New Year!

My tenant is to move out within a month and I have questions regarding claims that I can legally make against security deposit:

1/ Can I legally deduct a rekeying fee to have the locks changed after she moves out (whether she returns the keys or not)?

2/ Can I legally deduct legal fees for consultations and notices that were required during the course of the lease due to her "behavior".

Thanks for your words of advice,

Kathy

Extract from lease agreement in security deposit section:
Upon the due execution of this Agreement, Tenant shall deposit with Landlord the sum of ... as security for any damage caused to the Premises during the term hereof. Such deposit shall be returned to Tenant, without interest, and less any set off for damages to the Premises, furniture or fixtures or unpaid balances upon the termination of this Agreement.

 

[Malibu_Barbie]

Extract from lease agreement in security deposit section:
Upon the due execution of this Agreement, Tenant shall deposit with Landlord the sum of ... as security for any damage caused to the Premises during the term hereof. Such deposit shall be returned to Tenant, without interest, and less any set off for damages to the Premises, furniture or fixtures or unpaid balances upon the termination of this Agreement.

According to the security deposit provision, the only deductions you can make would have to be for "damage to the premises, furniture or fixtures" or any unpaid balance due under the lease agreement. Re-keying is lock is a basic turn-key procedure, and not considered a "damage". Unless her behavior resulted in "damage to the premises, furniture or fixtures" or she fails to satisfy an "unpaid balance" under the lease, then, no, legal fees for "behavior" is not deductible from the security deposit either ... it's considered a general expense in the regular course of business. You could possibly, however, deduct the legal fees on your income tax return as a expense.

 

[cmroze]

How to quantify damages

Hi Barbie:

Thank you again for your input, I understand and agree with you.

Just one more clarification/question on deposit since I am a first time landlord and want to be prepared since I only have 15 days to provide notice to impose claim: How to quantify damages (that notice has to include the $ amounts, I assume).

For instance, the tenant's dog damaged my sofa (running his claws on the sofa cushions it created some small holes / areas of abnormal wear/tear in the sofa). Since I assume that I cannot have the sofa cushions recovered, do I charge the tenant based on prorata of :
- one third of the cost of a new equivalent sofa (the sofa was two years old when tenantmoved in and tenant lived there for a year)
- or do I have to assume a 5 years life?

Thanks again for your words of wisdom,

Kathy

 

[Duranie]

I agree, you cannot charge for re-keying, that is your choice and you should eat the expense.

You don't have a claim either for legal fees, if you did not file any type of suit and got damages, you have no claim there.

You can try deducting for damages to the sofa, but depending on its value at that time, that needs to be reasonable as well, or get an estimate on how much the repair would be.

No need to try and nicle and dime her for everything, you should familiarize yourself with landlord/tenant laws in your state if you are going to be in this business.

 

[cmroze]

Thank you

Hi Duranie:

Thank you for your input.

I am quite familiar with the tenant/landlord laws and statutes of my state. My goal at this point is not to nickel and dime the tenant but to be prepared and familiarize myself owth best/customary practices as I am dealing with a difficult tenant and anticipate some difficulties and push-back in dealing with tenant w.r.t. security deposit.

It is very clear that the first step is to try to repair the item based on good faith estimates. Thus I was also trying to understand what to do in the case something cannot be repaired (e.g. sofa) and replaced within reasonable standards.

The only question that remains for me what is the appropriate/reasonable proration / depreciation method to use on any item to be replaced taking the example of this sofa that will need to be replaced.

Thanks,

Catherine

 

[Malibu_Barbie]

To determine a fair and reasonable depreciation value, you would first need to estimate the sofa's useful life with normal wear-and-tear. If it was a good quality sofa, then I would estimate its life to be approx. 10 years (this should be adjusted if the sofa was of lesser-quality), so its depreciation rate would be 10% each year. For example, if you paid $800 for the sofa, brand new, 3 years ago, its depreciated value would now be $560 (10% of $800 = $80 x 3 years = $240). Let's say you find a brand new replacement sofa of a like-quality for $1,100. You would deduct $240 for depreciation from $1,100, and the total amount the tenant is liable for would be $860.

You can also deduct for professional carpet cleaning if the tenant's dog urinated on the carpet, as this is not considered "normal wear-and tear".

Also, a landlord will usually ask for the tenant's forwarding address prior to vacating. The reason given is so that the landlord will know where to send the deposit after the tenant vacates the premises. However, this also helps the landlord locate the tenant after the move in the event the property damages and/or unpaid rent exceed the amount of the deposit and the landlord decides to file a civil suit to recover those losses.

 

[cmroze]

Hi Barbie:

Thanks again for writing, your response was exactly what I was looking for to help me with a specific calculation method and example. There should be no dispute that this method is fair and reasonable to the tenant if they damaged the item beyond repair.

I also appreciated you reminding me about the carpet and forwarding address. FYI, I had already included the forwarding address request in my "lease non renewal notice" to the tenant and noted that I needed it to contact the tenant regarding the disposition of the security deposit. I totally agree that some tenants do not like to leave forwarding address so they cannot be found but I assume that they will probably give a friend's address anyway rather than their next actual address.

You are a great team player,

Kathy

 

[Michael Wechsler]

Hi Barbie:

Thanks again for writing, your response was exactly what I was looking for to help me with a specific calculation method and example. There should be no dispute that this method is fair and reasonable to the tenant if they damaged the item beyond repair.

I also appreciated you reminding me about the carpet and forwarding address. FYI, I had already included the forwarding address request in my "lease non renewal notice" to the tenant and noted that I needed it to contact the tenant regarding the disposition of the security deposit. I totally agree that some tenants do not like to leave forwarding address so they cannot be found but I assume that they will probably give a friend's address anyway rather than their next actual address.

You are a great team player,

Kathy

LOL. The comments in this thread are great and useful. I would say that with what you are describing it sounds like not much money that can result in far more trouble than much of it is worth. Some of you mentioned this earlier. My "un-legal" thought is that if you really need to look for reimbursements, question whether a reasonable person would accept them as such or they might get extremely angry and take up more time (and time is money) than what you are receiving. Great stuff guys!!!