Security deposit drama is a real and it sometimes can become an aggravating part of apartment living. But move-outs don’t have to end with such anxious and bitter moments.
Informed renters – and it all begins with reading the lease – are able to set reasonable expectations about move-out refunds. This way, they won’t have to deal with breaking their budgets or stirring unnecessary angst.
Many key security deposit particulars - from what amount a landlord can rightfully demand at the lease signing to the steps to take when disputing the refund at move-out - are set by the state.
Victoria Cowart, Director of Operations, Adalease Property Management, Charleston, S.C., discusses the basics of the process in her state. Much of her commentary applies in other states, but it’s best to read-up on exactly how things will play out where you live.
Deposits are Down Payments
Apartment communities financially screen applicants who intend to sign a lease. The security deposit amount is based on that screening, which indicates the applicant’s financial well-being.
The deposit could range from $350 or a full months’ rent. (Other states have set rates and others use a sliding scale based on the amount of rent).
Deposits are used as placeholders for a prospect who is interested in a specific apartment home. Security deposit parameters are part of the lease, and the language in the lease explains what happens at move-in and move-out.
A move-out inspection must take place and their results communicated to the resident within 30 days of move-out. The walk-through inspection typically can last between five minutes and a half-hour.
“We invite the resident to walk through the inspection with us,” Cowart says. “We take photos and we take notes at move-in and then again at move-out and compare. And if there are charges at move-out, the photos are used to support those charges.”
The things most commonly focused on during a walk-through are appliances, walls, flooring, carpeting and window coverings.
“Based on the condition they are found to be in, these things either need to be wholly replaced or repaired, with costs based on a sliding scale, such as the age of the carpet and the degree of wear and tear it shows,” Cowart says.
“If things need repair or replacement beyond normal wear and tear, we price it out and deduct it from the security deposit.”
Another factor is the cost for the necessary housekeeping to be performed after move-out. (Interestingly, Cowart says housekeeping fees have not risen due to Covid-19.)
Challenging the Process
“When residents move out, there is the matter of the security deposit and the balanced owed,” she says. “They are two separate things. The balance owed includes things such as back rent or any outstanding fees such as damage fees.”
Should a resident want to challenge the process, Cowart says the property manager will first have a conversation with them to see if an agreement can be reached.
“The conversation is based on facts given their situation and the condition of the apartment,” she says.
“If the resident wants to sue and go to small claims court, in South Carolina, they stand to be awarded three times the amount they can prove was wrongfully withheld by management and feel that they deserve,” Cowart says.
“Because the financial bar is set that high for the property owner or management company, apartment operators have every reason to go through this process correctly and provide evidence for their case.”
Cowart estimates that about 40 percent of renters will rebuff (challenge the initial inspection and charge results) the original security deposit refund.
“But in my lengthy career, I can count on one hand how many times I’ve had to settle through small claims court, and in both cases, I countersued and came out ahead.”
Writing a Demand Letter
Residents who wish to sue over a security deposit dispute will first most likely email, write, or call the owner, demanding a larger refund or fix some other problem involving the deposit. Some states require this type of demand letter before the resident can begin a small claims case.
Disputes usually go before a judge (there are no juries) within a month or two. Residents may sue for the amount of the security deposit that they believe the owner wrongfully withheld, up to the state’s limit. The maximum amount for which you can sue in Florida’s small claims court, for example, is $5,000. In South Carolina, it can be as much as three times the deposit.
“If your landlord fails to send you a written itemization of your deposit as required by your state security deposit law, or you feel the landlord’s deductions were unfair, try first to work out some kind of agreement with your landlord,” writes NOLO, an online resource that helps consumers and small businesses find answers to their everyday legal and business questions.
“The landlord might allow the resident to do additional cleaning, rather than charge them for cleaning costs,” NOLO writes.
If negotiating with the landlord is unsuccessful, residents may put their concerns in writing, in the form of a demand letter.
On the demand letter, residents should clearly state their concerns and what they want – such as the return of the full deposit within five business days.
The demand letter should cite the given state’s security deposit law (find yours at Security Deposit Limits and Deadlines in your State chart) and state that the intention is to sue the landlord in small claims court if necessary. In some states, a written demand for the return of your security deposit must be made before the resident may sue in small claims court.
“It’s a good idea to send a demand letter regardless of whether or not your state requires it,” NOLO writes.
Send demand letters by certified mail (return receipt requested), or with another service that provides a receipt, establishing the date of delivery.
Keep a copy of the demand letter and the delivery receipt. They are required in court.