Letting Off Some Steam About Security Deposits

One of my least favorite parts of being a landlord is determining how much to charge people for damages and cleaning when they move out of a property.  This process ultimately drives the decision about how much of their security deposit they will get back.  Contrary to most people’s image of the money-grubbing landlord who wants to take you for all you are worth, when I sit down to fill out the paperwork I become a blubbering mess. I take other people’s money pretty seriously and I need to make sure I have ample justification for the charges I am claiming.  The other day, I was trying to explain to my assistant how this traumatic process turns me into a babbling idiot, and then two days later I was reminded why.

Let’s call this tenant Lisa.  Lisa and I have known each other for about six years.  She was one of the tenants in my first rental property.  When I sold that duplex, Lisa continued living there and we lost touch.  About two years later, Lisa got in touch with me because she had moved out of the property and the new owner refused to return her pet deposit because he said he never received it when the property changed ownership.  I went back and looked at all of the closing documents and sure enough; there was no record of the pet deposit. Technically this oversight was not my fault, but I believe in tenant’s rights to their money so I started making some phone calls.  The Title Company said it was not their fault because they operate under the direction of the parties to the transaction.  And not surprisingly, my voicemail message to the new owner (who I had also helped out a great deal) went unanswered. Technically, it was his fault for not checking the documents at closing.  In my message, I proposed that he and I split the cost of $200 so that Lisa could get her money back and we all could move on.  When no one else stepped up to take responsibility for the mistake, I decided to give Lisa the $200 out of my own pocket (which was pretty empty at the time).  I gave her the money right before Thanksgiving and she was extremely grateful. Everyone left with a warm and fuzzy feeling.

Fast forward a few years when I get a phone call from Lisa, who is in a panic.  The house she is living in now is full of mold and it is making her granddaughter sick.  She needs to move immediately and is wondering if I have anything available.  I happen to have a one bedroom apartment and so we negotiated an arrangement and I helped her talk through the best way to deal with her current landlord.  Lisa moves in and everything is going well, for the most part.  Her son and daughter in law move in next door for a little bit, with some concessions on my part for their financial history.  They also are fairly decent tenants. After about a year, Lisa suddenly gives me notice to move out.  She is on a month to month contract, so although it is unexpected her notice is perfectly legal.

It comes time to do Lisa’s security deposit return and I have the attention span of a flea.  I finally force myself through the process and get it done.  Lisa moved out in a hurry and had a cat and dog, so things did not look great.  Out of $600, she was only getting about $100 back.  I had ample documentation and the refund was pretty generous on my part. Forty eight hours after the check went in the mail, the text messages started flying. “I know I gave you more than $600 in deposits.” “I paid $400 for the pets.” Needless to say, I had a complete copy of Lisa’s paperwork that I checked before I sent the refund.  I told her this and yet her protests continued.  I reminded her that I cut her a deal on the pet deposit as a courtesy because of the history we had.  She kept at it and I told her I would send her copies of the paperwork the next day (copies of which she was given, but of course, lost).  Sure enough, all the paperwork lined up with my calculations.  When I sent her a message telling her the documents were in the mail showing that she only paid $200 for the pets, she claimed that she gave me more money after we signed the Rental Contract.  I told her that both pets were on the original contract and if she felt like she needed to research her payments to me with her bank, then she should feel free to do so.  Mind you, this is a woman who had gotten behind on her rent payments and completely lost track of what she owed me. I also sent her a complete register of all the payments she had made me.  I know more about this woman’s finances than she does.

So this dramatic response is why I hate returning people’s security deposits.  It brings out the worst in people.  It is like being spit in the face by a stranger after you just helped him change his tire in a downpour. I am going to continue to be fair, respectful and kind to my tenants because that is how I want to be in the world. Though, I think I might start doing a shot of tequila before I return their security deposits.

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About Learn to Be a Landlord
I currently am a real estate investor in Spokane, WA. I own and manage 79 rental units. My background is not in business, but in social services and community organizing. I also had way too much liberal arts education. Somehow that all fits together to make me a landlord!

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