Episode 37: HEY! They Kept My Security Deposit...
Summary
As a tenant, dealing with departing a unit, the cleaning, the moving, the stress, can be CRAZY! But then, what if your landlord keeps your security deposit? What do you do now? In today's episode, we review some of the ways to prepare yourself to avoid your landlord keeping your security deposit, the power of good record keeping of all communication, and then how to take action if you feel your landlord should return some or all of your security deposit.
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Full Episode Transcription
Welcome to my life as a landlord where we untangle all things housing and educate the curious. If you're
looking for some entertainment with some honest, awkward conversations, you've come to the right
show. I'm your host, Dr. Jennifer Salisbury. This is my life as a landlord. Welcome to it.
Hello there and welcome to my life as a landlord. I am Dr. Jen and I'm really excited because I'm getting the hang of
this YouTube thing. So if you'd rather watch the episode instead of listen, you can do so go to YouTube
and listen under the channels My life as a landlord and check it out. Today's episode is number 37. This
is a tenant perspective and the episode name is They kept My Deposit, so you guessed it. We're going to
talk all about today as a tenant. If the landlord has kept your deposit, what do you do? This is a ongoing
rotation of five predictable topics that are relevant to both us and Canadians. Last week was a landlord
topic, which was standard forms. Next week is a real estate development topic. And here we go. Here we
go. Intro of three points. So the first three points. First of all, if you're if you have departed a unit as a
tenant and you've got your landlord has your deposit, your security deposit or your pet damage deposit or
some kind of deposit or deposits. From when you started your tenancy and you've departed and. Well,
now what? Right? All you know is that you haven't gotten your money back. So the first thing you got to
do is you've got to gather some info. Then, Has there been any communication between you and the
landlord or the property manager? Let's let's face it, this might be a property manager. And at what point
do you take action? Right. That's that's the question then is, you know, and then what action do you take?
Right. They kept my deposit. Now what do you do? Okay, so gather some info. Let's jump into this. So
you departed the unit. The landlord of property management kept the deposit. And let's let's hope you did
a move out walk through with a condition inspection in writing, which is the proper way to do it. You
didn't just leave the keys on the counter and, you know, sent them a text and said, See you, bye. Because
now we're talking about getting your deposit back. Now let me just take an aside here for a second. A
deposit is not rent. 1s A deposit is not rent. Rent is something that is monthly payment, monthly upkeep.
A deposit is something that is a long term promise to the landlord that you are going to pay on time, that
you are going to pay, 1s that you're not going to skip out on the last month of rent. You're not you're
going to keep the condition of the unit proper, right? That you're not going to trash the unit. This is your
promise to the landlord. That promise, if you are looking at your your financial aspect of it is called a
liability. It's a liability for the landlord, but it's an asset for the tenant. But what's confusing is it's still
money, right? It's still money. Rent is paid and money you're deposit is paid in money. But a deposit is
not the same as rent. It's not rent. And a lot of tenants just go, Oh, yeah, well, I'm not paying my last
month. Just take my deposit and pay my last. No, your rent is your rent. You pay rent for your last month
and then we discuss the deposit. You don't just take it into the last. You don't take the deposit for last
month's rent. They're not the same thing. They're both money, but they're not the same bucket. Okay.
They're not the same. Okay. So let's talk about how you, as the tenant departed the unit. Did you give
your proper notice? Did you pay the last month's rent? As rent? You didn't just say take my deposit as
rent. That doesn't work. When you moved in, did you do a written condition inspection with either the
property manager or the landlord? Did you guys write down any known damage or not? 1s And then
three, did you do a proper move out inspection? And as a last resort you can take photos with a time
stamp. Now, if you look at the majority of different housing laws, written condition inspections are the
only way that you're going to be able to adhere the condition. However, if you take photos, like if you're
a tenant and you're taking photos of damage that's existing when you move in and there's a date time
stamp, which most, you know, smartphones at this point have that, then if you don't have a written
condition inspection, then there is an argument that you can prove or at least show what the condition
was at the time of your move. In Now, arbitration, a judge, somebody could say, no, that's not that's not
correct. It's just your way of of trying to preserve the condition of the unit. Now, the same can be said at
move out, but you've got to be careful because you want to do that walkthrough with your landlord. You
want to go through and say, Hey, wait a minute. This mark on the floor was there when I was. And, and
tenants always say that anyway. I mean, I just did a move out myself this week and oh that was like that.
When I moved in, that was like, Really? Let's look at the video. Let's look at the condition inspection
form. Because if it's not noted on the condition inspection form, is it willful damage or is it normal wear
and tear? Well, you're going to talk about that here in a second. Okay. I cannot stress to you as a tenant
how important it is that you have a written condition inspection both for move in and then move out.
Okay. You must do that. And you cannot just say take my deposit as last month's rent does not work like
that. I don't care where you are in North America or Canada, you cannot do that. Okay. So you've got to
gather your info. Did you do all of this stuff for the departure properly? Did you do it properly? If you
did, great, okay. Then you're way ahead of the game because I know a lot of landlords and tenants that do
not do this properly and then it ends up being a big fight, which we're going to talk about that big fight
here shortly. So let's say you move out, you've as a tenant, you've turned over the unit back to the
landlord or the property manager, and you're texting them, you're calling them, you've submitted
whatever their system is to request your deposit back. You have you know, you've done all those things
and there's been no communication. Okay. Or sometimes even better, maybe worse. Let's say that they've
kept your deposit and they just said there's damage, there's pain, there's smoke damage, there's wilful
damage, whatever it might be. Before I continue, let's talk about the difference between willful damage
and normal wear and tear. Okay. I have asked this question multiple times, multiple venues. What is
normal wear and tear? I'm going to put this on YouTube and normal wear and tear. What does that even
mean? Okay, here's the answer. It is a. Preference or it is a personal interpretation of what normal wear
and tear is. But I can tell you, I can tell you what it isn't. Normal wear and tear is not a punch in one of
the doors. It is not a kick in the drywall. That is called wilful damage. You've got malicious damage
there. It is not knife marks on your countertops. That is called willful damage. Okay. Now, if you've got
other examples of willful damage or there's lots and lots of questions of this with pictures on the
Facebook forums where you've got newbie landlords or people that are landlords that are in pickle that
will say, is this normal wear and tear? How much should I take off the deposit? How much? What should
you do? But the difference between normal wear and tear and wilful damage is normal. Wear and tear is
just from them living there. So it's just the use of the wall. There might be a scratch on the drywall. There
might be, you know, in and it depends on how long they've lived there. If they've lived there six months.
And it was brand new carpet when they moved in. And the carpet is absolutely trashed and it cannot be
salvaged. Well, guess what? There is an argument there that that is not normal wear and tear in six
months if they were there for six years. Debatable, right? Debatable. If it's ruined in six years, I would
argue. Why is the landlord why aren't you in there looking at the carpet as part of annual maintenance?
But I wanted to at least throw that in there and say if there is wilful damage, then it should be noted at the
time of move out on the condition inspection by both the landlord or property manager and the tenant.
Okay. Wilful, wilful damage needs to be noted at the inspection. That's the whole point of this inspection.
If there's just normal wear and tear items where things need to be freshened up, it needs to be repainted.
Maybe the the 1s I'm just trying to think of of some of these items. And usually the tenant will tell the
landlord or the property manager at that point, oh, by the way, this, this, this heating duct doesn't work.
It's plugged. That happened to me this week. And I went, okay, so we need to have that. We need to have
that clean. We need to have it looked at. Okay. So let's jump back into the scenario here. You are a
tenant, you've moved out. You have not gotten your deposit back yet. You may or may not have done the
departure correctly, but now the question is where is your deposit? That justification. If the landlord or
property manager is going to keep your deposit. They have got to have justification of why why they've
kept the deposit. What, beyond normal wear and tear? What are they keeping the deposit for? Okay, so
wilful damage for sure. Things like here's here's one that I have. I have a fireplace in one of my units and
it says, write in the lease again, written down right in the lease that at the end of your tenancy, if you
have used the fireplace even for one minute, it must be professionally cleaned and you've got to give me
the deposit at move out and if you don't. I get to charge you $200 from your deposit says right in the
lease. What to do and how to do it. So just so you're aware. So I already have notion this tenant departed
this week with a fireplace in the unit and they didn't provide this receipt and I know it wasn't cleaned. So
anyway, I'm dealing with all of that. But that's another thing that could be you've got to look at your
lease and go based on what's in the unit. What do you have permission in advance to deduct from the
deposit? This is one example. So wilful damage. Again, you want to make sure that at that time of that
move out, walk through that you have noted some potential areas where, hey, this is willful damage. Hey,
you agreed to have the fireplace cleaned. Hey, this door wasn't kicked in when you bought it or when you
took the unit. And you've got to do this properly. Okay. If let me keep going. That that if the landlord or
the the property manager is going to keep the deposit, then they've got to provide the justification in the
form of estimates or invoices meaning for the kicked in door for the fireplace, cleaning this kind of
things. There's a lot of folks out there that have gotten departed tenants and they've got crayon written all
over the walls all the way into the bathtubs. I mean, I've seen some of the terrible stuff where I just go,
Oh my gosh, that is willful damage that I don't care how you look at that. That is not normal wear and
tear. That is wilful damage. You need to get an estimate on getting that removed and take that estimate
and either have it done because you want to get the unit rented. Right. So get the estimate and say or the
invoice, whichever, deduct that off the deposit. But you've got to properly communicate with the tenant.
So as a tenant, if you have not had any justification from your landlord or from your property manager on
why they're keeping your deposit, that is a problem. That is a problem. Okay. Now let me jump into this.
You are under the time limit for returning the deposit and or communicating again. Go back to your local
tenancy act, your local housing code. There's got to be in there about the deposit and there is a time there
is a time limit of how long a landlord has to either communicate or to return the money. And it's very
specific. It's very specific. It will say you've got ten days or it has to be postmarked by midnight on the
15th day, or it'll be very specific and very specific to that state, province or territory. So if tenants, if you
are in this this pickle right now where your your landlord has kept your deposit. First of all, what day did
you move out and then check your local housing laws. And no, you need to count the days because if you
end up going to arbitration or to court, the judge will count the days. Right. So let's talk more about this
In this episode so far, we've gathered some information. We talked about communication. We talked
about wilful damage and normal wear and tear. Now, at some point you take action. Right. And what at
what point is that? Where do you take action? What does that even look like? Well, go back to your local
housing code, your residential tenancy act, whatever is applicable, and learn how long it is that you have
that the landlord has to return the deposit and whatever that is, or whether it's 30 days or 14 or 15 or 20.
Every state or province or territory is different. And once you get one day passed that day. Then you can
take action. Okay, Now what is the action that you can take most of the time in US or Canada? You have
to take the landlord or the property manager to small claims court. Remember, the deposit is not rent. The
deposit is now part of an asset that the tenant has given the landlord as a as a promise to behave. So if the
landlord is keeping that deposit, the tenant now basically has to sue the landlord to get that money back.
Okay. Now there is a bit of a process to file small claims to get that deposit back. You've got to show all
your documents, including the lease, including the condition, moving inspection and any pictures you
might have taken. The condition move out, inspection, any pictures you might have taken, invoices that
the landlord may or may not have provided, and either they align or they don't align. And if if they don't
align and you're making an argument to small claims most of the time. The courts, because at this point
it's escalated to court. You're basically starting a lawsuit. If you're going to have a court rule, then what
ends up happening is if they're going to rule in your favor, the landlord has a significant penalty in the
state of Hawaii. If a tenant takes a landlord to small claims court, the penalty is triple the deposit. Triple.
Wow. So if the deposit is $2,000, the landlord has to pay $6,000 if they're found in error. This is pretty
serious. And then the tenant can actually go after the landlord for that money, especially if they have a
judgment. Now, I'm not going to get into how do you actually file a small claims? If you are a tenant and
you are in this scenario, please reach out to your local housing authority or your local legal aid or housing
nonprofit. Somebody will guide you on how to start the small claims process. I'm not going to go into
that in this episode because I want to make sure that you kind of know the the high points of how to do
this properly and then when to take action. So the action part I'm going to leave for you in this episode
we went over how what to expect when you're doing your move out. You know, did you give your proper
notice? Did you do a condition inspection, not only at move in and move out? Was it all written down
properly? It should have been. We discussed that the deposit is not rent. The difference between wilful
damage and normal wear and tear. And then if a landlord or property manager is going to keep your
deposit, what that looks like in the justification of what that looks like, and if you do not agree, you need
to check the timing of how long that landlord or property manager has to give back your deposit. If you
feel that that you are correct and they are wrong, you can file a claim at small claims and at that point
you've got to show all your written documentation that you've received to prove that you're right and you
deposit, you earn all of your deposit, all or part of your deposit back. Okay. Call to action. You if you're a
tenant, even if you're a landlord in this rental business, ladies and gentlemen, you need to know what is
the process, but also what is the penalty? How does this all work? I am astounded at how many people
are in the rental business and do not know the rules of rental businesses. Unbelievable. So I challenge
you wherever your rentals are. Whatever state, province or territory your rentals are in, jump to that
location's residential act or tenancy code, whatever it's called, for your area and you will know what that
is or Google it if you don't read it. And what is the process on returning the deposit from the landlord
back to the tenant? What is the proper process and what is the proper time? What is the time? Because
there will be a day that you have to provide that deposit back to the tenant or again, what is the penalty?
Again, you've got to know the game and play it well as a tenant. You need to know the rules. As a
landlord or property manager, you need to know the rules as well. Okay, so this is the episode. Episode is
They kept my deposit. I really hope that you learn something. I kind of went on several different rabbit
holes in this one, but my goodness, there is a lot of of moving parts. When you've got a deposit in play
here, it's very important. One other note I'm going to throw in here. When I do move out inspections with
the with the tenant, I will always ask, how do you want your deposit returned now? And legally,
depending on where you are, you're supposed to know their forwarding address. Okay, that's part of the
rules. But if they want an e-transfer or they want a Venmo or they want a check mailed, where do they
what do they want that mailed? Um, how do they want it delivered back to them? That's very important
because once that communication is done and once they departed your unit, sometimes it can be difficult
to communicate with the tenant, especially if things are starting to go sideways, especially about the
deposit. Okay, I'm throwing that in there. Let me know your comments questions on our Facebook group
or our YouTube channel. My Life as a Landlord. Thank you. YouTubers who are watching right now and
know that I create the next podcasts through our comments and questions that you guys all bring up. Next
week's podcast topic is real estate development. This is all about improving properties, changing
properties. That will be episode number 38, and the title of that episode is Start With the Exit in Mind.
Super cool. Thanks for joining me today. I'll see you next Saturday.
Thank you for joining us this week. To view the complete show notes
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Thank you again for joining me, Dr. Jennifer Salisbury in this episode of My Life as a Landlord. I'll see you next time.