Today we are talking about security deposits and how to protect your Phoenix area rental property. The number one argument owners will often have with their tenants is the cost of repairs and the amount that should be charged to the security deposit.
Damages and Repair Costs
At HomeQwik, we do a move in video and a move out video. We also do a six month inspection in between. So, with all those videos, we almost never have a disagreement with the tenants about the charges at the end. For the time it takes you to create a video, you have an invaluable tool. You cannot dispute what you see in a video. We also ask tenants to provide a move in checklist. This gives them the opportunity to tell us about anything that might be wrong with the property. We won’t hold them accountable for those things when they move out.
Normal Wear and Tear
Trying to detail normal wear and tear can be difficult. Here in Arizona, the law says that as long as it’s normal, tenants are allowed to have a little bit of wear and tear in your property. This means that you might have some scuff marks on your paint and there may be handprints. The carpet won’t look brand new when you get it back from your tenants. What you need to look for are stains, holes in the carpet and damage that goes beyond wear and tear. If every single wall needs new paint, that might be considered damage. Try to use common sense. If you wind up in front of a judge with a security deposit dispute, what will the judge think?
In Arizona, we have a maximum deposit amount of one and a half times the monthly rent. That’s the most you can ask for in a security deposit. There might be additional charges in what you collect, such as a cleaning fee or a pet fee. But the actual security deposit can only be so much. When you’re collecting your security deposit, you also need to be aware of fair housing laws and any situations where you will allow a co-signer. Whatever you decide with your tenant for move-in conditions, you cannot go above that maximum deposit amount. If you don’t understand these requirements, make sure you talk to someone so you stay legal and fair before entering into a lease.
Strict guidelines are in place regarding the timeline you have for refunding a tenant’s security deposit. Make sure you understand when the full accounting is due after move out and what you can keep. You have to give the money back to the tenant in time or there will be lots of legal ramifications as a property manager.
What you need to remember about security deposits is that you have to give the money back in due time and if you’re keeping any money to cover damages and repairs, you need to have a valid reason and plenty of evidence. Remember to use videos, because a good video will stop an argument in its tracks.
If you have any questions about security deposits, please contact us at HomeQwik and we’d be happy to tell you more.