Tag Archives fordeposit disputes

How to Handle Tenant Deposit Disputes

angry_phoneAs a green, freshly minted apartment landlord with zero property management experience in 1990, I one day received an abrupt and stark introduction to the world of security deposit disputes. This occurred roughly three days after mailing my first deposit accounting to a departed tenant, from which damage deductions had been assessed.

The tenant response was a phone call of raw anger, yelling, threats, accusations of dishonesty, and some colorful language. I responded to this verbal assault with relative calm, given that I was caught completely off guard and at first, literally wondering if the tenant was joking, so ridiculous were the protestations.

I muttered short statements of fact in between the barrages of verbal hostility.

“We found fish tank rocks in the disposal and it had to be replaced”.
“Your dog left pee stains on the carpet and those had to be removed”.
“Someone punched two holes in the back bedroom door and the door had to be replaced”.

These, in my mind, were indisputable facts, not matters of subjective pettiness. I really couldn’t even believe the conversation was happening. Little did I know about the interesting psychology and visceral anger that deposit deductions evoke in some tenants.

The closest I can get to understanding is the jolt of anger I feel when I get nailed with a $2 late fee at Blockbuster. It’s rather curious. I know I was late. It was my fault. I did it. I remember dropping the movie in the slot at 10PM the week before, knowing I would get a late fee.

Yet, while standing there in front of the cashier, paying for a new movie and being told I owe $2 late fee for the previous movie, I feel an almost uncontrolable urge to argue about it, to demand to know “which movie” it was (even though I already know). When was it due. And to say how stupid the fees are and how it was better the old way when there were no late fees.

Lucky for me, the person in line ahead of me already made a complete ass of themselves doing all of the aforementioned, and holding up the line in the process, so I control myself and make no mention of it other than to say “ok” when the cashier asks if I want to pay the late fee now.

But it nevertheless is a curious feeling that defies logic. The notion of feeling victimized and abused for being held accountable for not keeping an agreement for which I had full and complete control, but nonetheless did not perform as required.

So, if a perfectly sane person such as myself, who believes 100% in personal responsibility and accountability, and who tries to live his life in accordance with those principles, can feel an emotional jolt of anger over a $2 late fee at Blockbuster, I can only guess that a tenant opening up a deposit refund statement might possibly feel something as strong or stronger upon seeing hundreds of dollars in deposit deductions, no matter how justified and no matter how much they may have been expecting the outcome.

So, my point in opening up with all of this is simply that, as landlords, it should come as no surprise when we receive angry protest from a former tenant who wants to argue over deductions that were made from the security deposit. I view it almost as a sort of temporarily insanity that comes over the tenant, and I don’t take it personally.

And, as a landlord, knowing that this situation is more likely than not, no matter how careful and fair you thought you were being in assessing damage deductions, you should have a clear and pre-established set of steps to follow when dealing with such disputes.

Step 1 – Set Expectations in Writing
I won’t cover the entire topic here, but in a previous blog article I wrote entitled “Why I Never Do Move-out Walk-throughs with Departing Tenants“, you’ll find a move-out instructions letter that I send to all departing tenants explaining what must happen if they wish to avoid deposit deductions. Feel free to borrow from mine or make your own, but have something that you send to tenants upon receiving a notice to vacate. This helps the tenant understand what needs to happen, and it serves as the first in several simple steps that protect you legally and make it more difficult for a tenant to paint you as an unreasonable landlord out to rip people off.

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Posted by Steve
7 years ago