After all the work landlords do to make sure their rental units are habitable and comfortable, collecting rent and security deposits probably seems like the easy part. However, there are certain rules landlords must follow when taking their tenant's money. Here are some quick tips to help landlords avoid making a legal misstep.
Tips for Handling Rent
There are few rules about collecting rent. Nevertheless, it's best to treat the payment of rent with some care, since a mistake could potentially lead to a legal dispute.
Tips for Handling Security Deposits
Handling security deposits is a bit trickier. That's because many jurisdictions consider the security deposit to be the tenant's money, even though it's in the landlord's possession. Consequently, your state or city may require you to keep security deposits separate from your own money or deposit them in an interest bearing account. Some states also limit the amount of a security deposit.
There are also rules about the types of repairs you can make using the security deposit. Generally, you only use the security deposit to fix damage caused by the tenant, and not "normal wear and tear." Normal wear and tear includes things like:
The rules for returning the security deposit vary by state. Some states require landlords to list any repairs made with the security deposit along with their cost. Many states have deadlines by which the security deposit must be returned, so don't delay making repairs when the tenant moves out.
Finally, if you decide to collect last month's rent instead of a security deposit, generally you can only use that money as the last month's rent, as opposed to using it to pay for any repairs to the unit, regardless of what caused them.
Get a Free Real Estate Attorney Match for Your Rental Concerns
As a landlord, you want to ensure a safe, healthy, and reliable home for your tenants. You also need to ensure timely payment of rent and probably will want to collect a security deposit as well. Following the law while employing the practices listed above will help you avoid problems in the future. If you are having a dispute with a tenant or need legal help with your rental terms, consider speaking with an attorney. Have a local real estate lawyer evaluate your situation at no charge.