TENANT WHO USED DEPOSIT AS RENT LEFT DAMAGE

Q: What can I do if my tenant used their security deposit as their last month’s rent and then left the property damaged? — Brenda

A: The security deposit is supposed to be used to offset potential damage to your rental property and should not be used as rent.

Many landlords will collect both a security deposit and last month’s rent when beginning a new lease to avoid this problem. The landlord must keep these deposits in a separate bank account and tell the tenant where the money is held. When the time comes, property owners may transfer the advance rent from that account to their “operating” account to be used as rent but may not transfer the security deposit to pay the rent if their tenant falls behind.

In your situation, when your tenant did not pay the final month, you could have demanded payment or started an eviction.

Many property owners opt to do what you did because it seems to make sense, only to find the home damaged, leaving them with the choice to eat the cost or sue their former tenant for the repair costs.

A common misconception is that the tenant is only responsible for repairs up to the security deposit amount. The reality is tenants are responsible for the cost of repairing any damage they caused. In your case, you will need to sue your tenant for any unpaid rent and the repairs.

If a landlord does not follow the correct procedure at the end of the lease or does not return the unused portion of the security deposit, the tenant can sue to force the landlord to return the funds.

Finally, if the last month’s rent is being held and the tenant breaks the lease early, the landlord can usually keep the funds to help make up for the tenant’s breach of the lease agreement.