Property Management Blog

Phoenix Property Managers: How Do You Settle Security Deposit Disputes?

Dora Pinter - Friday, July 17, 2020

One of the most common reasons for disputes between landlords and tenants is that they don’t agree on deductions made from the security deposit. Legally, landlords are permitted to charge the deposit for damage as well as any cleaning fees, unpaid rent, or overdue utilities. They are not permitted to charge for wear and tear. Naturally, tenants tend to see everything as wear and tear while landlords often see everything as damage.

Security deposit disputes can be disruptive, expensive, and stressful. You don’t want it to get to the courthouse if it doesn’t have to. So today, we’re sharing some tips on how to settle disagreements with your tenants about what the security deposit should pay for after they move out.

Double Check Your Calculations

Make sure the security deposit claim you have calculated is correct. You want to be fair, and you want to be able to support the deductions you’ve made. Check your math and revisit the move-in and move-out inspection reports to make sure you are charging what you should be charging. If you stand by your deductions, have your tenants fill out a written form that documents their dispute against what you’ve charged.

Sit Down with Your Tenant

Communication is going to be extremely important once you have acknowledged that your tenant disputes what you’ve charged. Don’t avoid the tenants or refuse to engage. Instead, invite your tenants to meet with you in person to resolve the dispute. They might not bother. Or, they might feel strongly about their case and come in to meet with you.

Review the move-in and move-out inspection reports with your tenants. When you can show them the videos and the photos you took and compare the condition of the property together, you might get somewhere. It’s hard to have a differing opinion when you’re both looking at the same photo. Typically, this will make the dispute go away. Remain patient, professional, and respectful while you explain why you deducted what you did.

Work Something Out if You Can

If there’s an error in what you deducted, admit it and rectify the situation immediately with an apology. Even if you’re right, decide how important it is to you to be right. Settling out of court is going to be far less expensive for you than going to court, even if you win. Arguing with your tenants over a $100 charge is probably not worth your time and effort.

If the dispute cannot be resolved, the tenants will have to file a lawsuit in court. The judge will look at your documentation and hear the tenant’s case and make a decision. If the courts rule against you, it’s possible you’ll not only have to return the full deposit, but extra punitive damages as well. This is painful both financially and emotionally. And, it’s why we recommend coming to a resolution before you risk a court appearance.

Work Something Out if You CanPlease contact us at Service Star Realty if you have any questions about Phoenix property management or how to handle a security deposit dispute.