We have given our tenant notice that we will not extend the lease even on a month to month basis after the term is up. We received a call asking to use the deposit as last month’s rent. We got the impression that he will need money for the next place. What should we tell him? Should we proceed with a Three Day Notice to Pay Rent or Quit and proceed with an eviction or use the deposit?
You are not a bank. You are in business to make money and that deposit is your security for getting your property back in good shape. Do not let a tenant use it for rent. If they need money they can go to a Bank or ask relatives.
Absolutely! Many times this does the trick; if nothing else they will ask you what is going on and you can explain they are in violation of the lease, now owe a late fee and will have an eviction on their record if they don’t pay. Additional point out a deposit is for covering damages which are yet undetermined; not last months rent. I’d give them a few days and then proceed to file papers and have the tenant served to appear in court.
Be polite and firm. Avoid any childish discusions about “what is fair” “cut me break” or other sob stories.
I wouldn’t go for it. The deposit is meant for clean up and repairs after they’ve moved out. Unless you’re sure you can go to them afterward and get reimbursed for any expenses you incur cleaning up after them, you should insist they stick to the terms of the lease. It’s neither your problem nor your fault that they haven’t got the funds lined up for a new place. You’ve given them the option to stay, with a new lease, and they’ve declined.
It would be nice if you could resolve this without involving the courts, that’s never pleasant. But explain to them that if this is the recourse they are forcing you to resolve to, you won’t hesitate to do so.
Good luck.
Never give a dime back until the place has been inspected thoroughly. And that is after they move so therefore it can’t be the last month’s rent.
So…you let them use the deposit for the last month’s rent…then, they leave the place trashy, holes in the walls, needing new carpet, etc. and guess who gets to foot the bill for that?
Was your deposit the same as a month’s rent? If so, shame on you!
Keith
Keith, what should the deposit be more or less than monthly rent?
Thanks
I charge about $500 for a house that rents for $650…a little more for a nicer house. We need to be able to get it cleaned, paint touch-up, etc. and fix anything the tenants broke.
We have had great tenants, though so they’ve all gotten all/most of their deposits back. We don’t “nickle and dime” our tenants and we don’t charge for “fair wear and tear”…our last tenants were missing a globe off of the light over the kitchen sink ($8) and we had to touch up paint on a couple of baseboards…we didn’t charge them. They rented for 18 months at $650 to 675 so we got about $12K in rent from them…we could afford the $8 and the spot-painting.
Keith
I usually charge 1 month’s rent, but more recently have gone to 1mo +$200 on some properties. It kind of depends on what is typical in the area. Some (many?) states have an upper limit. In Calif is 2mo. rent. which I think you are unlikely to find renter who can pony up that much cabbage at one time (unless it s real cheap place)
They aren’t renting a really cheap place because they have extra dough either, probably living paycheck to paycheck as it is.
My properties were all $65K or less…I guess that falls into the “real cheap place” category…
Keith
Kieth, what is the reasoning behind not taking a deposit equal to the rent?
Thanks
I charged $1,100/mo for rent for one of my homes with a $1,100 security deposit. They moved in on the 20th of the month, so I collected prorated rent for the month + next month’s rent + part of the SD. In the next month, I got nothing, and in the following month I got rent + the balance of the SD. So, it looked similar to this:
Month-1: $390.32 + $1,100 + $550 = $2,040.32
Month-2: $0
Month-3: $1,100 + $550 = $1,650
Month-4, etc: $1,100
For this VERY reason…the tenants get the idea that it’s advanced rent payment which it absolutely isn’t. If you make it a clearly different amount and explain it in detail in your lease agreement, then there are NO questions!
Keith
real cheap meaning sub-$300/mn for a unit. My point is a $300 deposit is not going to cover much damage/clean-up. Most of my places are in the $450-$700/unit which is the range I charge for deposits; that covers >80% of the time I have pulled back some security deposit for damges, unpaid late fees etc.