Landlord Won't Give Back Security Deposit
by
S David Cooper on Nov. 07, 2016
Real Estate Landlord-Tenant Real Estate
Summary: Withholding a Security Deposit is Risky and (Possibly) Costly
The tenant has moved out, and the landlord wants to withhold part of the security deposit to cover certain damages to the property.
What are the Tenant's and Landlord's rights?
The statutes regarding a tenant's security deposit are probably the most misunderstood part of landlord-tenant law. The statutes do not actually decide either party's liability for damage to the property or the right to be compensated. The statutes merely describe the procedure for handling the security deposit. This article specifically addresses what happens when the tenant moves out, and the potential consequences of the landlord withholding the security deposit.
Ch.83.49 tells us exactly what to do. Now, if you are reading this article, you can read the statute...but what does all that legal mumbo jumbo really mean? It means this...
If the landlord doesn't plan to keep any of the security deposit, he must return all of it within 15 days after tenant moves out. If the landlord plans to keep any part of the security deposit, he must send a notice to the tenant within 30 days, explaining why he is withholding part of the deposit. If the landlord does not send the money within 15 days or the notice within 30 days, the landlord has no right to keep the deposit. That much is pretty clear from reading the statute. The pitfalls for many landlords lie in how to properly prepare the notice and what happens when the tenant objects to the withholding of the security deposit.
If the tenant objects, in writing, to the landlord within 15 days after receiving the landlord's notice to withhold, guess what -- THE LANDLORD CANNOT WITHHOLD ANY MONEY! This is where many landlords go wrong. They will often send a refund check with the notice of intent to withhold the security deposit, failing to wait the 15 days for the tenant to object. When the tenant does object, the landlord still refuses to return the money withheld. This is a violation of the statute, and could open the landlord up to a claim of conversion or even civil theft. It is important to note that we are only talking about keeping the security deposit. We are not talking about who has a right to sue or who is owed money. The only time the landlord can keep the security deposit is if the landlord sends a proper notice to the tenant within 30 days and the tenant fails to object within 15 days. In other words, landlords, you have a lot of hoops to jump though, and it is easy to miss one.
Why is it such a big deal if the landlord keeps the money?
The landlord is owed that money, right? Not necessarily. Just because a landlord says it cost them $300 to paint the apartment or to replace the carpet does not mean that it really cost that much. Additionally, the landlord might have charged the tenant for some repairs that were not the tenant's responsibility. Even if the tenant damaged the property, the landlord cannot "improve" the property at the tenant's expense. For example, The landlord can't paint the whole house because of some marks on one wall. He cannot buy a top-of-the-line stainless steel stove and oven to replace an damaged, old, basic one. He cannot replace all of the carpet in the house just because one room had pet stains. Many times, the landlord will also attempt to charge for things that were not the tenant's responsibility under the lease, such as replacing light bulbs, pest control, or re-sodding the lawn.
So, what happens if the landlord keeps money he shouldn't have?
Bad things. That's what. Eventually, a dispute over the security deposit will have to be settled by the parties...or by a judge. The tenant can sue the landlord for withholding an excessive amount of the security deposit. The landlord will have to prove to the judge that every little charge is necessary and appropriate. You need photos of the damage, cost estimates, expert witness testimony, and whatever other evidence you can find to help the case. If the court rules that the landlord kept more than what he was supposed to, the landlord could be hit with massive penalties. Civil theft carries a penalty of triple damages, so if the landlord withheld $200 too much, the landlord would have to pay the tenant $600. Additionally, because this is a security deposit dispute, the winner at court gets to have the other side pay its attorneys' fees and costs. Wait! There is more bad news for landlords. Depending on how many tenant lawyers there are in your area, the court might award a "multiplier" to the attorneys' fees to double or even triple the amount. Going to trial, even in small claims court can easily take 30 or more hours of attorney time. Attorneys' fees may be as much as $450/hour. Let's do the math... 30 x $450 = $13,500. Now, multiply that by 3, and that is $40,500 in attorneys' fees that the landlord could be forced to pay -- all over a $200 dispute!
What to do? You landlords may be reading this and thinking, "WTH? That is a lot of money!" You are right. It is meant to be a lot of money to deter you from withholding too much of the tenant's money. But, if the tenant caused damages, what is a landlord to do? There is another remedy offered by the law. Giving back the tenant's security deposit does not waive the landlord's right to sue the tenant for damages. You can give back all of the deposit, and then sue the tenant. I know what you landlords are thinking, though. "If the tenant had any money, he would have paid the rent." I agree -- not to mention that you would have to spend even more money to bring the law suit against the tenant. And if you won? So what? If the tenant has no money and no property, how does that help you? I don't have an answer for you. It is hard being a landlord. My strong advice is simply to make sure that you are 100% solid in the amount that you do withhold from the security deposit. Take photographs at the start of every lease and after move out - EVERY TIME. Tenants, I advise you to do the same. Keep receipts and written estimates. Have someone witness the damage (or lack of damage). Have your lease reviewed by a competent landlord/tenant attorney in the state where the property is located. Landlord/tenant laws vary from state to state, and a lease drafted for a property in New York will not be appropriate for a property in Florida.
In short, if you are involved in any dispute regarding a security deposit, the best solution is to settle it. If you cannot, get a lawyer -- even if you think you cannot afford it. Many attorneys offer contingency fees to tenants and flat rates to landlords.
What are the Tenant's and Landlord's rights?
The statutes regarding a tenant's security deposit are probably the most misunderstood part of landlord-tenant law. The statutes do not actually decide either party's liability for damage to the property or the right to be compensated. The statutes merely describe the procedure for handling the security deposit. This article specifically addresses what happens when the tenant moves out, and the potential consequences of the landlord withholding the security deposit.
Ch.83.49 tells us exactly what to do. Now, if you are reading this article, you can read the statute...but what does all that legal mumbo jumbo really mean? It means this...
If the landlord doesn't plan to keep any of the security deposit, he must return all of it within 15 days after tenant moves out. If the landlord plans to keep any part of the security deposit, he must send a notice to the tenant within 30 days, explaining why he is withholding part of the deposit. If the landlord does not send the money within 15 days or the notice within 30 days, the landlord has no right to keep the deposit. That much is pretty clear from reading the statute. The pitfalls for many landlords lie in how to properly prepare the notice and what happens when the tenant objects to the withholding of the security deposit.
If the tenant objects, in writing, to the landlord within 15 days after receiving the landlord's notice to withhold, guess what -- THE LANDLORD CANNOT WITHHOLD ANY MONEY! This is where many landlords go wrong. They will often send a refund check with the notice of intent to withhold the security deposit, failing to wait the 15 days for the tenant to object. When the tenant does object, the landlord still refuses to return the money withheld. This is a violation of the statute, and could open the landlord up to a claim of conversion or even civil theft. It is important to note that we are only talking about keeping the security deposit. We are not talking about who has a right to sue or who is owed money. The only time the landlord can keep the security deposit is if the landlord sends a proper notice to the tenant within 30 days and the tenant fails to object within 15 days. In other words, landlords, you have a lot of hoops to jump though, and it is easy to miss one.
Why is it such a big deal if the landlord keeps the money?
The landlord is owed that money, right? Not necessarily. Just because a landlord says it cost them $300 to paint the apartment or to replace the carpet does not mean that it really cost that much. Additionally, the landlord might have charged the tenant for some repairs that were not the tenant's responsibility. Even if the tenant damaged the property, the landlord cannot "improve" the property at the tenant's expense. For example, The landlord can't paint the whole house because of some marks on one wall. He cannot buy a top-of-the-line stainless steel stove and oven to replace an damaged, old, basic one. He cannot replace all of the carpet in the house just because one room had pet stains. Many times, the landlord will also attempt to charge for things that were not the tenant's responsibility under the lease, such as replacing light bulbs, pest control, or re-sodding the lawn.
So, what happens if the landlord keeps money he shouldn't have?
Bad things. That's what. Eventually, a dispute over the security deposit will have to be settled by the parties...or by a judge. The tenant can sue the landlord for withholding an excessive amount of the security deposit. The landlord will have to prove to the judge that every little charge is necessary and appropriate. You need photos of the damage, cost estimates, expert witness testimony, and whatever other evidence you can find to help the case. If the court rules that the landlord kept more than what he was supposed to, the landlord could be hit with massive penalties. Civil theft carries a penalty of triple damages, so if the landlord withheld $200 too much, the landlord would have to pay the tenant $600. Additionally, because this is a security deposit dispute, the winner at court gets to have the other side pay its attorneys' fees and costs. Wait! There is more bad news for landlords. Depending on how many tenant lawyers there are in your area, the court might award a "multiplier" to the attorneys' fees to double or even triple the amount. Going to trial, even in small claims court can easily take 30 or more hours of attorney time. Attorneys' fees may be as much as $450/hour. Let's do the math... 30 x $450 = $13,500. Now, multiply that by 3, and that is $40,500 in attorneys' fees that the landlord could be forced to pay -- all over a $200 dispute!
What to do? You landlords may be reading this and thinking, "WTH? That is a lot of money!" You are right. It is meant to be a lot of money to deter you from withholding too much of the tenant's money. But, if the tenant caused damages, what is a landlord to do? There is another remedy offered by the law. Giving back the tenant's security deposit does not waive the landlord's right to sue the tenant for damages. You can give back all of the deposit, and then sue the tenant. I know what you landlords are thinking, though. "If the tenant had any money, he would have paid the rent." I agree -- not to mention that you would have to spend even more money to bring the law suit against the tenant. And if you won? So what? If the tenant has no money and no property, how does that help you? I don't have an answer for you. It is hard being a landlord. My strong advice is simply to make sure that you are 100% solid in the amount that you do withhold from the security deposit. Take photographs at the start of every lease and after move out - EVERY TIME. Tenants, I advise you to do the same. Keep receipts and written estimates. Have someone witness the damage (or lack of damage). Have your lease reviewed by a competent landlord/tenant attorney in the state where the property is located. Landlord/tenant laws vary from state to state, and a lease drafted for a property in New York will not be appropriate for a property in Florida.
In short, if you are involved in any dispute regarding a security deposit, the best solution is to settle it. If you cannot, get a lawyer -- even if you think you cannot afford it. Many attorneys offer contingency fees to tenants and flat rates to landlords.