Owner Held Secur Owner Held Security Deposit Agreement: Fill & Download for Free

A2AInteresting question.There are a lot of ways to view questions like this; I always like to view them as directed graphs, where the answer depends on which of the vertices you pick it up by, like so:(graph, in the process of being picked up by the center dot)Let’s name some of these dots, shall we?Condition when you agreed to rentCondition when you moved inCondition when prior lease (if any) was signedCondition when last lease was signedCondition at time of security depositWe might also pick two of the dots:Best condition, everWorst condition, everNow questions like this are typically asked when there is money involved.Let me take a wild guess: security deposit?And now the tenant wants to pick things up by the dot that gets them their security deposit back, and the landlord wants to pick things up by the dot that lets them keep the security deposit.Am I warm?Here’s what it usually means.Usually, the legal answer for both of you is going to be the agreed upon condition that the property will be in for a security deposit refund, at the time the security deposit is paid.Meaning that if the tenant moved in, lived there for a couple years without a lease, but only with a verbal agreement, but there was a security deposit, then there was an agreement surrounding the security deposit.Usually, this would be “the condition of the property at the time of move-in”.If, on the other hand, the security deposit was paid later, then it’s the agreement of the condition in which the property is to be returned, at the time the security deposit was agreed upon.[EDIT: emphasis added; I wanted to make clear that the agreement could specify a condition other than the current or the initial condition]The lease may have come into being in order to set up a security deposit agreement, in fact, or it may have come into being in order to formalize the arrangement, or some other arrangement thereafter.Ideally, as a landlord, you want a security deposit up front.You want it to apply to the condition at the time of move-in.Sometimes, though, it doesn’t happen until later.Here’s how an after move-in security deposit requirement conversation usually goes:Landlord:Hey Bob; I notice you’ve been letting the place get a little run down. I notice there’s a couple of pretty big dents in the wall that weren’t there when you moved in, the other day when you had me in to fix the sink for you…Tenant:Yeah, the kids got a little rambunctious; I’ll definitely get that fixed…Landlord:About that… I was in a month ago, and I can see from the doorway that they aren’t fixed already; I’m going to have to ask you for a security deposit.This may or may not trigger one or both of you wanting to formalize the rental agreement with a lease.Or the lease may come from a change of ownership. Or from some other event.But it’s pretty clear: the landlord wants the property back in the same condition as it was when you moved in — or they want part or all of the deposit to cover the damages to the property, beyond normal wear-and-tear.Modifying eventsThere are certain events that can modify the condition in which the property must be returned for the tenant to recover the deposit:Normal wear and tear; the tenant can’t be held responsible for thisLandlord responsibility events that change the condition of the property (some types of flooding, outlets going out, etc.); surprisingly, in most jurisdictions: landlords are responsible for replacing light bulbs in fixturesCapital improvements to the property:For example, say there was a light in the dining room, and the landlord at some point during the rental, replaces it with a ceiling fan and a light instead, the tenant hangs christmas decorations from the fan, the motor burns out, and now it’s a dead fan and a light. Light in, light out, right? Nope. Tenant is responsible for the new fan.Carpet gets replaced a month before the tenant decides to call it quits. The original carpet was in “close to needing replaced” condition. New carpet now has a huge wine stain on it at move out. Crappy carpet in, crappy carpet out? Nope. Tenant is responsible for the damage.Sale of the property — this is the interesting oneIt’s actually the new owners responsibility to get the old owner to correct any defects prior to taking possession; whether this means that the old owner brow-beats the tenant into moving hoarded G.I. Joe Action Figures into storage, or the old owner puts a lien on the security deposit (assuming there was one) and patches the holes in the wall, doesn’t matter.Once the new owner signs off on the condition of the property: that’s the baseline condition of the property.Transfer of security deposit from old to new owner is complicated in this case; I’m not going to cover it here.The new owner may require the renter to sign a lease to continue. As part of the conditions of the lease, it may specify returning the property to the condition it was in at the time the tenant moved in. If that’s the case, then the tenant has just obligated themselves retroactively to responsibility for damage/cleaning.Which all boils down to the agreed upon return condition at the time the security deposit was paid.Which means it’s governed by an informal agreement, or it’s governed by the language in the lease, and it may be (retroactively) governed by the language in the lease, if the lease covers that.And whether it’s the tenant asking, or the landlord asking here: this is why you get a lease in place up front, even if it’s your old high school friend. Otherwise things get complicated.

The security deposit is collected and held against the possibility that the tenant leaves the unit with damages or needing cleaning. The tenant is required to return the unit in the same condition they received it, less normal wear and tear. The security deposit is not meant to pay the last two months rent. As an owner I would not go for that. As far as legal implications, it is entirely possible an owner/manager might start eviction proceedings if you did not pay the rent as specified in the lease agreement. Not a good thing for you going forward should you wish to lease another apartment or house somewhere.

The simple answer: The amount necessary to cover expenses and legally justifiable to deduct for cleaning, repairs, and damages from the Security Deposit. Especially difficult: measuring “normal wear and tear” vs cleaning, damages and repairs.Measuring the amount sufficient for expenses legally justified to withhold from a vacating tenant’s Security Deposit is one of the most difficult tasks for property managers and landlords. This is eveidenced by the high number of cases brought against rental property owners for the return of Security Deposits in Small Claims Courts by their former tenants. State laws and local ordinances have jurisdiction over what constitutes difference between “normal wear and tear” and cleaning, damages and repairs required to make the rental unit move-in ready. Some States do not allow any part of the Security Deposit to be considered as non-refundable. Others limit the amount that may be required, set time limits for the accounting for and return of amounts held as Security Deposits along with providing for pre-move out inspections for the tenants to be advised of the potential costs and a final walk-thru after having vacated the property. How Security Deposits are to be held by property owners and whether or not interest is required to be paid to the tenant is also determined by where you reside.The important lesson is: a clearly written (and understood by all parties) Rental Agreement that includes a pre-move in walk through form completed by the property manager in the presence of and signed by tenant. The same document is to be used during the move out process to account for any pre-existing issues along with the condition of the property at move-out. Communication of expectations and the cost of cleaning and repairs along with regular scheduled inspections for preventative care annually during the time of the tenant’s occupancy of your property will go a long way in protecting the financial integrity of the property and maintaining excellent resident relations.