Magazine article Journal of Property Management

Reduced Returns

Magazine article Journal of Property Management

Reduced Returns

Article excerpt

Proper handling of security deposits is key to avoiding complaints

Complaints about security deposits tepresent a sizeable number of the total cases presented to the Board of Ethical Inquiry. The Board first determines whether the complaint is a landlord vs. tenant contract dispute over the return of the security deposit or a potential law violation, disregard for tenants' rights, unprofessional conduct or other ethical violation.

If, for example, there was a difference of opinion as to whether a carpet was clean then the matter would generally be considered a landlord/tenant disagreement and the complaint would be dismissed. On the other hand, if the law clearly required itemized documentation for security deposit deductions, an ethical violation might have occurred.

No ethics violations would have occurred if the law and the lease gave Olivia the right to deduct funds at her sole discretion, and if Olivia's conduct was courteous and professional. However, most state laws give tenants the right to reasonable and timely explanations. Note that if there were any court proceedings pending with respect to an alleged violation of law then the Hearing Board would not independently make a determination as to whether the law had been broken.

With respect to the deductions for cleaning services not yet rendered, if a move-out report showed that the carpet still required cleaning and if the carpet cleaner could not perform the service before the new tenant took occupancy, then the advance deduction might be justified. On the other hand, if there were no moveout report on the condition of the apartment then the advance deduction would be harder to justify.

In a similar case, there was no move-out report to document the condition of the apartment when the tenant left nor was there any documentation that established the condition of the apartment when the new tenant moved in. Further, there was no explanation of the services to be provided other than "general cleaning" nor any explanation as to why those services were not performed prior to the new tenant's arrival-even after the original tenant requested an explanation. …

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