Many property management procedures and duties are time-consuming, difficult, and full of potential pitfalls, but none rival the claim for damages against a security deposit. Properly handling a claim is a very difficult process and one that should not be taken lightly. State laws govern the timelines, the specific language required to be used in the notices, and the details of the filing process. Be careful not to stub your toe on this one!

Discovering the Problem Areas

After a tenant moves out and surrenders possession of the property, the property manager should immediately perform a move out inspection. Ideally, the unit should be left in 'move in ready condition' for the next tenant, and thus the inspection process becomes a mere formality. However, more times than not, the property reveals obvious deficiencies when a thorough inspection of the premises is undertaken.

Examples of minor problems discovered during the move out inspection include the following:

a) the carpets have not been professionally cleaned (always ask for the receipt)

b) holes are left in the walls where pictures once hung

c) trash is left in the unit

d) the oven and/or refrigerator is not properly cleaned

e) the lawn and/or landscaping is left in disarray (mowing, edging, and watering are typically the tenants responsibility)

Once the move out inspection is completed, the property manager has a list of the items that need to be addressed.

Assessing the Damages

The next step in this process is to assess the damages in hard dollars by obtaining actual written estimates to repair the unit and return it to its original move in ready condition. Based on the above examples, the following actions would need to be taken:

a) Obtain a written estimate to professionally clean the carpets. Normally an estimate of this type would note the general condition of the carpets and what specifically would be done in the cleaning process.

b) Obtain an estimate to patch the holes in the walls and touch up the paint. In severe cases, entire walls or even rooms must be painted. Always get the estimate in writing with an itemization of the specific work that needs to be performed.

c) Obtain an estimate to clean the unit including the oven, the refrigerator, removal of all trash or garbage, and any other necessary cleaning required to bring the unit back to its original condition.

d) Obtain an estimate for the lawn.

Obtaining Owner Authorization

Once the estimates are received, it's time to convey the information to the owner. The inspection report and all of the supporting photos need to be sent to the owner for his or her review. Be sure and obtain a written response from the owner after the information has been reviewed.

The estimates for the repair of the damages also need to be sent to the owner. Once the review of the estimates has been completed by the owner, it's time to obtain written authorization to proceed with both the repairs and the claim. Be careful to get the owner's authorization in writing or by email. (Remember: print the authorization and put it in the file for future reference!) Once the authorization is obtained, release the hounds(!!!) and send out the contractors to complete the repairs.

Filing the Claim

In Florida we are allowed only 15 days if the security deposit is to be refunded in full, or 30 days to file a claim for damages against the deposit. Once the estimates and owner authorization are received, it's time to fill out the state form and send it by certified mail to the last known address of the tenant. This must be done within the 30 day time period!

Once the invoices for the completed repairs have arrived, it's time to perform a follow up inspection to make sure everything is in order at the unit. Take good, clear photos of the repairs, the freshly cleaned unit, and document everything. Once the repairs are completed, the unit is restored to it's original condition, and the property manager is convinced that the unit has no further tenant-inflicted damages, it's time to pay the contractors and refund the balance of the security deposit to the departed tenant.

So how's that Big Toe feeling now?

This is one in a series of articles on Property Management 101 for landlords, tenants, and managers alike.