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VOLUME 3RHow To Get a Deposit BackBy Melanie GreenWhen someone prepares to rent a new place, saving money for move-in expenses are top priority. In addition to beating the odds of a competitive rental market, applicants must make sure their credit score is up to par and they have a decent rental history.
Once those two boxes are checked off, a large portion of initial funds includes at least a month or two worth of rent and a security deposit. But what happens when the renter has a change of heart and wants the deposit back?
In this guide, learn about:
Different types of deposits
Which deposits are refundable
Steps to take to increase the likelihood of getting a deposit back
How to avoid tension with a landlord, even when ending the lease early
Deadlines to receive deposits
Legal steps to get the deposit back
Regardless of which deposit is paid for and whether it’s refundable or not, all tenants should read through their leases to make sure deposited funds are kept in the landlord’s separate business account. Here’s what else is on a need-to-know basis.
Different Types of DepositsThere are four different types of deposits that tenants may have to pay:
Earnest Deposits With an earnest deposit, a tenant pays the landlord to hold a rental for a designated period of time. In the event that tenants change their minds, it is unlikely that they would get the earnest deposit back because the landlord has possibly missed out on another interested tenant.
Application Deposits The tenant also pays money to a landlord as part of a rental application. In Texas, there are different laws for application deposits and fees. The application deposit is refundable if the applicant is rejected as a tenant. However, application fees are nonrefundable. In Florida, all application fees are nonrefundable.
First and Last Month’s Rent Deposits Tenants may have to pay first and last month’s rent upfront when they first lease a property. A deposit collected specifically for the last month’s rent can only be used to pay the last month’s rent and cannot be used for damages to the property or to pay for cleaning. In the event that a tenant moves out earlier than the agreed-upon lease term, the landlord can use this as the last month’s rent.
Based on the agreement between the tenant and the landlord surrounding early move-out and breaking lease terms, the landlord may take actions to hold the tenant responsible for paying additional money for the months unpaid on the lease. One strategy tenants can use to encourage landlords to break the lease amicably is to proactively find tenants to take over the lease. This prevents the landlord from having a lapse of tenancy in the rental.
Security Deposits A security deposit covers potential damages to the property caused by the tenants, and can be used for repairs or to clean the property once a tenant moves out. For tenants with pets, there might be a pet fee, in addition to a pet-related security deposit. After the move-out inspection, the security deposit should be returned to the tenant in full if there are no damages or cleaning needs that the landlord needs to pay for.
Plan Ahead and Document Condition of Rental UnitTenants get their security deposit back if they leave the rental in the same or better condition than when they rented it. If they cause damage to the property, the cost of repairs is deducted from the amount of the security deposit that landlords return. Tenants are not responsible for any damages that existed prior to the time they moved in.
Avoid Tension With Landlord, Even When Moving Out EarlyIt can be stressful and expensive to move again, and tenants may wish the security deposit could be returned to them quickly. However, it is important to not let these tensions impact interactions with the landlord, as this could cause the landlord to be less likely to work with the tenants.
Consider the landlord’s perspective, too. If a tenant wants to move out early, this could be an inconvenience and a potential loss of income for the landlord. Now they must find a new tenant to cover expenses due to the early move. Tenants can try to address this by offering to look for someone to fill the vacancy. This might encourage the landlord to return a security deposit sooner.
Request To Attend Final Property InspectionDuring the final property inspection, the landlord assesses the condition of the unit after it’s been emptied, and determines what repairs and cleaning services are needed. Tenants can request to attend the final property inspection with the landlord to see the condition of the unit together. This duo walk-through can limit bad faith deductions.
Know Deadlines for Returning DepositsThe exact timeline for landlords to legally return the security deposit varies based on where the rental is located. In Texas, landlords have 30 days after the tenant surrenders the rental to return the security deposit. They do not have to keep the security deposit in a separate account. However, tenants must provide landlords with their forwarding address.
In Florida, landlords must keep security deposits in a separate account. If that account bears interest, the tenant can get a portion of the interest back. Depending on what the landlord elects, tenants can collect at least 75% of the annualized average interest rate or interest at a rate of 5% each year. The landlord has 30 days to provide written notice of making a claim against the security deposit. If the landlord doesn’t plan to make a claim for that money, the security deposit must be returned within the first 15 days after a tenant moves out.
Follow Up With LandlordIf it has been more than 30 days since the tenant moves out, tenants can follow up with the landlord about the security deposit. Sometimes there are reasons why the security deposit hasn’t been returned, such as needing the tenant’s new forwarding address. Following up is also a reminder to the landlord that the tenant is keeping track of how long it is taking for it to be returned.
Taking proactive steps to document the condition of the unit and following up with the landlord might be all that tenants need to get their security deposit back. In the event that these steps do not work, tenants can opt to take legal action such as speaking to a real estate lawyer or going through small claims court. Tenants should document all interactions and attempts to get their security deposit back before escalating it through the legal system.