What to do if the deposit doesn’t cover the damage or unpaid rent

Written by Laura Agadoni on . Posted in edited, For Landlords, Laws & Regulations, Leases & Legal, Move-in/Move-out, paid, Rent & Expenses, Screening, Security Deposits, Step 13 - Return Deposit

You did the right thing in collecting a security deposit. But what happens when that deposit isn’t enough to cover damages or unpaid rent?

Most landlords collect a security deposit equal to one month’s rent at move-in time to cover any damages or unpaid rent at move-out time. But if there were extensive damages to the property or if the tenant left without paying last month’s rent and there were damages, you’re out some money, and that isn’t right.

You have options, though. Let’s explore them.

1. Communicate with your tenant

To legally withhold the security deposit, you must, in most states, send a letter to your tenant explaining why you are holding some or all the deposit. And you must do so within the time limit specified by your state. You can find your state law here.

Here’s a template for documenting and itemizing deductions from the security deposit.

Send this document or one like it to your tenant to let them know why you are withholding some or all the security deposit.

If they still owe you money beyond the security deposit, you’ll also need to send a demand letter.

2. Send a demand letter

Along with sending the itemized list, you need to send a letter asking for what your tenant owes you, called a “demand letter.”

Here’s a sample of a demand letter you can send a tenant who owes you money.

3. Decide whether you should go to small claims court

You might receive the money owed to you after sending the demand letter. But if you don’t, send the letter a second time, attaching the first letter along with the second. If you still get nothing, you need to assess whether it’s worth your time and effort to take your tenant to small claims court.

Related: How to file a small claims lawsuit against your landlord or renter

The upside of going to small claims court is that you’ll likely win a judgment against your tenant if you can prove to the judge that your tenant does, indeed, owe you money. You get your money (theoretically anyway: see about being broke below), and you get satisfaction in that you were not taken advantage of.

But there are downsides to small claims court as well.

It’s time-consuming.

You need to prepare your case, organize the evidence, learn how to go to small claims court, and attend the hearing in the town in which your rental property is located.

Your tenant might be broke.

If you win a judgment, you still need to collect on that judgment. If your tenant has no money and no job, you won’t be able to collect.

You might not have the evidence.

If you didn’t keep proof, such as how your property looked at move-in time compared with how it looked when your tenant left, you might not be able to win in small claims court.

You pay filing fees and might lose pay by taking time off work.

Filing fees are usually less than $100 and you get them back if you win your case, but if you don’t have a strong case and lose, you need to be prepared to lose your filing fee. And depending on how valuable your time is, if you need to take the day off from work, you need to factor that cost in as well.

Your tenant could file a countersuit.

Whether your tenant has a case against you or not, they could file a countersuit. If you haven’t done everything by the book, you actually might go home owing your tenant money.

But if you can say “yes” to the following, you should seriously consider going to small claims court:

  • Your tenant owes you a significant sum of money.
  • You have proof of what you are owed.
  • Your ex-tenant has a job or a source of income.
  • You have the time and energy for small claims court.

If you don’t think you’ll get much or any money, you might want to write this off as a loss and move on.

Try to prevent excessive damages in the first place

It’s good to know what to do if you’re owed money, but it’s even better to prevent this situation from happening in the first place. Here are three measures to take to help avoid being out any money.

1. Conduct regular inspections

One way to help prevent excessive damage to your rental property is to perform periodic inspections. It’s important to strike the right balance between keeping tabs on what’s going on with your rental property and not becoming intrusive to your tenants. It’s typical to inspect your property at least once a year. Some landlords do this twice a year or even quarterly.

Related: How Often Can a Landlord Inspect a Rental Property?

If you notice a problem, such as a tenant sneaking in a pet or an extra tenant or two, or if you notice a dying lawn or a water stain on the ceiling, you can nip the problem in the bud before a small issue becomes an expensive problem.

2. Have a walk-through a month before move-out

The time to do a walk-through is when the tenant is moving out or immediately after they move out. (You do that, right?) A walk-through lets you know whether you will need to withhold any of the security deposit.

But you can also do a walk-through about a month before your tenant moves out. At that time, you can go over with your tenant any items that need fixing. By doing the walk-through a month in advance, you give your tenant a chance to fix any problems so they can get all or most of their deposit back.

3. Screen tenants

A great way to help ensure you don’t lose money is to get good tenants in your property in the first place. And the way to do that is by tenant screening. Of course, screening doesn’t guarantee a perfect landlord/tenant relationship, but it helps immensely.

I use Cozy to screen tenants. I require a background and credit check on all applicants. The applicants pay directly to Cozy for this service, and I receive the information to review, which helps me decide whom to rent my properties to.

Bottom line

Making repairs because of damages tenants cause and being out rent for a month or more from a tenant who stiffed you are risks landlords take. Knowing what to do if this happens to you and helping prevent this from happening in the first place lessens your risk of losing money.

What’s a tenant walk-through?

Written by Laura Agadoni on . Posted in edited, For Renters, Laws & Regulations, Leases & Legal, Maintenance & Renovations, Move-in/Move-out, paid, Security Deposits

Tenant walkthroughAfter you move out of your rental, how can you prove the carpet came with stains already on it or that the countertop didn’t get chipped during your stay?

If you don’t do a tenant walk-through, also called a landlord walk-through or a move-in/move-out walk-through, you often can’t prove existing damage. If that’s the case, it becomes your word against your landlord’s.

Learn how to prove existing damage so it doesn’t become your word against your landlord’s.

Landlords ask for a security deposit to cover any damages caused to the property during a tenant’s stay. Landlords aren’t supposed to charge for normal wear and tear or to pay for brand-new upgrades. (Although a cleaning fee or something along those lines is sometimes required as part of the lease agreement.)

If you’re renting a unit that has some damage, make sure your landlord doesn’t charge you for that damage when you move out. The way to ensure you aren’t is to request a tenant walk-through at two times: move-in and move-out.

The good news is that landlords usually want to do a walk-through just as much as you do. Why? It goes both ways. If you damage something during your stay, the landlord needs to prove that damage was not there when they gave you the keys.

Use a checklist

Before you move into a rental, you need to look at more than the pretty things, such as the nice view from the bedroom window. You need to look for damages or defects, too.

It’s difficult to know what to look for or to know whether you inspected everything you should, so it helps to have a checklist with you. Landlords often provide tenants with a checklist, but if yours doesn’t, you can use this one.

Have a copy for yourself, and make a copy for your landlord. Or just take a picture of your checklist after it’s filled out and signed, and send it to your landlord. The important thing is that you both agree with what’s on the list. Once you do, you both need to sign the checklist.

File the checklist with your lease. You can do this in a file folder that you put in a safe place at home. Or save it on your computer. You’ll need to bring this checklist with you when you move out if you have a move-out inspection with your landlord. If you don’t have move-out walk-through with your landlord, you’ll need the checklist in case your landlord tries to charge you for damages already noted on the checklist.

Take pictures and/or video

You can take pictures or video of the rental in addition to or in place of filling out the checklist. This is another way for both landlords and tenants to have proof of what the unit looked like at move-in and at move-out. It’s best to date stamp the photos somehow, such as using an app that shows the date. With video, state the date at the beginning.

Related: Record a Video of the Move-in/Move-out Inspection

When it’s time to move out

A couple of weeks before you move out, you might want to request your landlord do a walk-through with you. That way, if they see possible problems, they can let you know what you need to fix to avoid being charged.

If your landlord isn’t interested in doing that, you can go over your checklist, photos, or video yourself. If you return the unit in the same condition it was in when you moved in (minus normal wear and tear), you should receive all your security deposit.

Related: The Ultimate Guide to “Normal Wear and Tear”

The day you move out (and after all your stuff is out) is the time to fill out the move-out part of the checklist or to take a second set of photos or another video. Remember to date everything. Now, you have a before-and-after record.

The day you move out, your landlord might do a walk-through with you. But your landlord doesn’t have to do that. They might prefer to conduct the inspection after you leave. Some landlords feel stressed or rushed to conduct a proper walk-through with a tenant following them around.

And that’s okay. Landlords have a certain time limit to return the security deposit or provide a reason why they are holding all or part of it. This varies by state. Look up your state’s law here.

Just make sure if your landlord keeps all or part of your security deposit that it’s for damage you really caused. If your landlord is wrongfully holding your deposit, and if you have completed the checklist or have photos or video, it will be easy enough to prove.

A basic guide to landlord and tenant responsibilities

Written by Sarah Block on . Posted in edited, For Landlords, For Renters, Laws & Regulations, Leases & Legal, Maintenance & Renovations, Move-in/Move-out, paid, Security Deposits

Who’s responsible for what in a tenant/landlord relationship?

I have my fair share of crazy landlord stories. I once had a tenant who wanted to move out a month after moving in. The question was: did they need to abide by the lease even though it just started? A year later, I had a tenant file a lawsuit because they believed damage in the unit was the landlord’s responsibility. So, who was right in each of these scenarios? What responsibilities did each party have?

We are going to dive into the not so fun, but always relevant, topic of responsibility. Laws vary between states, and even cities, so pay particular attention to your jurisdiction’s laws. Additionally, the lease will have specific rights outlined that must be obeyed. To learn specific landlord/tenant laws by state, visit this comprehensive guide.

Top 5 debated tenant/landlord responsibilities

1. Security deposit

Landlords are responsible for returning security deposits, usually within 15-45 days of the move-out date, but this varies by jurisdiction, so be sure to know yours. Landlords who own between 10 and 25 units or more often need to hold the security deposit in an interest bearing account. This also varies by state.

If the landlord is withholding any of the security deposit for loss of rent or damage costs, an itemized list needs to be sent to the tenant within the legal time frame for your jurisdiction. What happens if a landlord ignores this law? They can owe the tenant twice the security deposit plus court fees.

Related: What to do if your landlord wrongfully kept your security deposit

2. Lease termination notice

Occasionally, tenants need to break a lease for various reasons. Whether moving out of state or fighting with a roommate, the law needs to be followed. Annual leases lapse on the date listed in the lease. Although, state-by-state the laws vary, and you might need to give notice that you will not be renewing.

When ending a lease early, additional issues arise. The lease generally outlines requirements for breaking a lease; however, a rule of thumb is that the tenant is responsible for the rent until either the end of the lease or a new tenant takes over the lease, whatever happens first.

Monthly leases, in general, require 30-days’ notice from the date rent is due.

So what happened with my tenant who wanted to move out a month after moving in? When that tenant wanted to break the lease so soon, we went by the lease agreement. The tenant paid a fee to have the unit re-listed and was responsible for the rent until new tenants signed a lease.

Related: Can my tenant break the lease?

3. Damage responsibility

The party responsible for rental property damage is a touchy subject, and the reason is clear. The answer is not cut and dry. The general understanding is that the tenant is not responsible for normal wear and tear but is responsible for the damage they have caused. The question is: what is normal wear and tear?

Normal wear and tear falls within these categories:

  • Minor paint damage
  • Faded or worn carpets
  • Faded lamp and window coverings
  • Lightbulb replacements
  • Rust or mold in the bathroom
  • Smelly garbage disposal

As you can see, normal wear and tear are items that would have happened if anyone was was living in the unit; you, your tenant, your mom, your mom’s tenant, etc.

However, more extensive damage is the tenant’s responsibility, such as:

  • Broken window coverings
  • Holes in the wall
  • Pet damage
  • Broken items—doors, windows, appliances
  • Unapproved decor

And here’s what happened with my tenants who thought damage in the unit was my responsibility: When my tenants sued us over the definition of normal wear and tear, the judge decided that all damage above the wear of general use was considered damage that needed to be repaid. Something to note: the judge did not allow us to charge based on quotes to repair damage, only repair receipts.

Related: The ultimate guide to normal wear and tear

4. Habitability

Landlords have a responsibility to provide a habitable place for their tenants to live. But what does habitability mean? Habitability means a safe and healthy environment. Plumbing, electricity, heating, and (in some areas) cooling need to be in working order. Doors and locks must be working correctly. The structure needs to be sound.

Landlords are required to:

  • Ensure the building structure is intact
  • Maintain common areas
  • Keep utilities in working order
  • Remove rodent infestations
  • Manage environmental hazards

Related: 9 maintenance issues tenants are responsible for

5. Utilities

The party responsible for utilities can be complicated to determine. While landlords have the right to require tenants to pay for their own utilities, the renter has the right to working utilities to meet “habitability” requirements.

A good course of action is to have a solid lease with clear responsibilities. The lease must outline who is responsible for paying utilities. Many utility companies have landlord provisions. A landlord can contact a utility company and set it up so if a tenant does not pay the bill, the landlord is notified. This way, the utilities won’t be turned off for nonpayment, and the landlord can avoid frozen pipes or a lawsuit for a rental property that is not habitable. The landlord can then bill the tenant for the nonpayment, and there should be a provision in the lease for utility nonpayment and associated fees.

In conclusion

While I have acquired some crazy landlord stories during my years in the industry, they have each taught me something new. I became an expert in my local jurisdiction’s rental laws and became better able to protect myself in the future. When taking on a new tenant and lease, re-examine your lease and make sure that the responsibilities are legal and clearly outlined so there are no gray areas. Gray areas are the cause of many landlord and tenant headaches.

I’d love to hear your landlord-tenant stories. Feel free to leave them in the comments below.

Can I get more money from a furnished rental?

Written by Laura Agadoni on . Posted in edited, For Landlords, Income Ideas, Laws & Regulations, paid, Rent & Expenses, Rental Advertising, Security Deposits

Furnished RentalsAn interview with Lucas Hall, Landlordology’s founder and head of industry relations at Cozy.

Not only can you get more money from a furnished rental, demand is growing in the furnished rental market, even with the popularity of Airbnb. Over the past decade, there have been more renters overall, and a percentage of those renters prefer to rent a furnished home for a variety of reasons.

I recently spoke with Lucas to get his opinion on what it takes to get into the furnished rental business and to get his best advice for landlords who are thinking about breaking into this niche segment of “landlording.”

First, lets talk about what exactly a furnished rental is.

There are two types of furnished rentals: long-term, meaning a few months or more, and short-term, such as vacation properties.

Most long-term rental properties typically don’t come furnished. But they can. And there are some benefits for renters. Furnished rentals usually have all the furniture and appliances someone would need, and they may or may not have day-to-day essentials such as plates, silverware, and linens.

Short-term rentals for 30 days or fewer are completely furnished with linens, a vacuum cleaner, grill—everything you can want. The idea is that all you do is bring your suitcase and move in.

What kind of furniture should you put in a furnished rental? Cheap motel furniture? High-end stuff?

The type and quality of furniture to buy should mirror the type of unit you have. So if you have a high-end unit that commands thousands of dollars a month, then you should probably have a leather couch, a nice bed frame, and art on the walls. Whereas if you have housing that attracts contract workers, for example, who make between $20,000 and $40,000 a year, you can have used furniture that’s still in great shape. Or you can get furniture from places like IKEA.

In other words, if your clientele is willing to pay $3,000 a month for a two-bedroom, that’s the clientele who would expect to have a nice sofa.

Another consideration is that if you buy the nicest furnishings, there is a chance things will get stolen. If you buy the best coffeemaker or the most expensive knives, those items might ‘disappear.’ You’re better off buying middle-of-the-road items that serve their function.

What is the market for a furnished rental? Who wants to stay in one?

I have had renters for long-term furnished rentals who are moving from across the country for a job, and it’s a big convenience to just be able to move right in. There’s no need to move furniture or to shop for furniture right away.

Short-term is a whole different game. There you have weekly or monthly vacation rentals. You also have traveling nurses who tend to stay for two to six months, and the hospital pays for it.

Related: How to market your rental to traveling nurses

How do you market a furnished rental? What, if any, are the differences in your advertisement?

It’s important to put in the title that you have a furnished rental. Someone who needs furnished housing will be looking for that first. An unfurnished rental in this case will be a deal breaker. Also describe in the listing what the furnishings are. And make sure you show pictures of all the furnishings.

An important benefit of a furnished rental is that furnished units generally look better in listing photos, particularly when you stage properly. You want your furnishings to look really good in pictures. Your furnishings should be clean, useful, and complement the space and the color scheme.

Whenever you’re advertising a property, whether it’s a long-term unfurnished rental or a short-term furnished rental, you should photograph it with furniture in it.

Related: How to shoot real estate photos like a pro

How much does it typically cost to furnish a rental property?

I have had experience furnishing a two-bedroom condo and a studio. For the studio, I spent between $2,000 and $3,000. With the two-bedroom, I spent about $10,000 to furnish it. I bought a little nicer for the two-bedroom because it was going to be a short-term rental. I needed durable furnishings.

My tip when it comes to buying furnishings, whether it’s for a short- or long-term rental, is to buy stain-resistant materials. Otherwise, you’re stuck with regular cleanings or having to replace the furniture every year.

Now for the question that helps landlords decide whether they will offer a furnished rental or not:

How much more money can you get for a furnished rental?

You can typically get 15 to 20 percent more for a furnished long-term rental. It’s a convenience. People are willing to pay for convenience.

And for a furnished short-term rental, you can get 40 to 50 percent more at a minimum. In some cases, you can even double that, getting 100 percent more, depending on the location of the property.

You can typically get 15 to 20 percent more for a furnished long-term rental. It’s a convenience. People are willing to pay for convenience.

Which locations are best for furnished rentals?

I’ve had the most success with furnished rentals in high-density or highly desirable areas. I’ve had a successful furnished studio, for example, right in the heart of Washington, D.C., right near Capitol Hill and a metro station. People wanted to live there and were willing to pay for the convenience of a furnished rental. Places like that appeal to people whose time is more important than money and who would rather spend more than deal with furnishing a rental property.

Can you charge a larger security deposit for a furnished rental? After all, there are now theft of furnishings and furniture damage to consider.

Absolutely. But you can charge only what your state allows. This is often between one and two months’ rent as a maximum. So most of the time, landlords charge one month’s rent as a security deposit for an unfurnished rental. But for a furnished rental, I think it’s smart to double that, or charge two months’ rent. And just like any security deposit, it’s fully refundable as long as there are no damages.

Do you have any further tips or advice for our readers?

A good opportunity for people who want to do long-term furnished rentals is to get into corporate housing or provide housing for traveling nurses. You figure out if there’s a company or hospital that’s willing to make a corporate agreement with you. They pay the rent and are responsible for finding tenants.

Are you interested in getting into the furnished rental business? Or are you in it now? Let us know in the comments!

Tenant move-out letter plus 2 other free templates

Written by Laura Agadoni on . Posted in edited, For Landlords, Landlord Tips, Leases & Legal, Move-in/Move-out, paid, Rent & Expenses, Security Deposits, Step 12 - Move-Out

Your goal as a landlord is not only to have tenants but to keep tenants (the good ones anyway) as long as possible. But no matter how wonderful you are as a landlord, and how great your rental may be, there usually comes a time when your tenant needs to move.

When your tenant plans to move, you should make the move-out process as smooth as possible. This benefits you and your tenant—when your tenant knows what to expect, they’re more likely to meet your expectations. Here are some templates you can use when your tenants’ leases are about to end.

The lease renewal letter

If you want your tenant to sign a new lease, contact them about two months before the current lease is due to end. The purpose of the lease renewal letter is to find out what their intentions are and to explain what they need to do if they wish to continue to live in your rental.

Tip: This is the time to raise the rent if you intend to.

Related: How to raise the rent in 4 easy steps [free template]

Related: Should I increase rental rates every year?

Note: If you do nothing after the lease ends, and your tenant stays, your tenant becomes a month-to-month tenant.

Lease renewal letter template

Note: You don’t have to increase the rent. If you don’t want to, change that section to reflect the rent will remain the same.

2. The move-out letter

If your tenant decides not to renew and wishes to move, send them a move-out letter about a month before the lease ends. The purpose is to give instructions on what you expect of your tenant.

Move-out letter template

Note: This letter contains language about lease requirements. Make sure yours does as well before you include that.

3. Notice to pay rent or quit

If your current tenant missed a rent payment (or two), you probably shouldn’t invite them to renew the lease. In fact, you should send them a letter asking them to pay the rent ASAP or leave.

Notice to pay rent or quit template

Once you rent your property, you will hopefully have wonderful tenants who stay a long time. But since that isn’t always the case, you can still make things easier for everyone involved if you are proactive with your tenants by letting them know what the expectations are during move-out time.

3 reasons you might not want to collect a security deposit

Written by Laura Agadoni on . Posted in edited, For Landlords, Laws & Regulations, paid, Security Deposits

It’s important to collect a security deposit that you can use in case of damages to your property, or to compensate you for unpaid rent.

But some landlords have stopped collecting security deposits.

Here are three reasons why.

But first, about the security deposit

The security deposit is exactly what it sounds like—security against damages or unpaid rent. So if your tenant damages your property beyond normal wear and tear, you can use the security deposit money to make repairs. Or if your tenant skipped out on you without paying rent, you can keep the security deposit.

But if there are no damages, and if your tenant has faithfully paid rent each month, you need to return the security deposit. And you need to do so by the deadline for your state.

Some landlords don’t do that, thinking the security deposit is a windfall for them. That sort of landlord makes it necessary for security deposit laws to be created. The problem is that sometimes the laws governing security deposits are more like “gotchas” for the landlord.

Related: How to handle security deposits properly

1. Security deposit laws can be oppressive

Every state, and sometimes jurisdiction, has laws pertaining to the security deposit. You can look up your state’s law here.

Most states have straightforward laws, such as this: Landlords must return the security deposit to the tenant within 30 days after the lease ends. Landlords must give a written explanation and itemize any money withheld. Check your state law since these laws vary.

Chicago, for example, is particularly tough on landlords. Here are some laws Chicago landlords must follow:

  • Landlords must place the security deposit in a federally insured interest-bearing account in an Illinois bank. This account must be a separate account, just for the security deposit.
  • The landlord must tell the tenant which bank holds the security deposit.
  • If the tenant paid first month’s rent and security deposit as one check or as one electronic funds transfer, the landlord needs to transfer the security deposit portion to the separate security deposit account within five business days.
  • Landlord must provide tenant with a signed receipt at the time of receiving the security deposit. The receipt must include the date, amount, name of person receiving the deposit, and a description of the rental unit.
  • Landlord must pay tenant any interest earned within 30 days of a 12-month term.
  • The security deposit must be returned within 45 days of move out.
  • If the landlord will withhold money, they must provide an itemized statement of damages and the estimated or actual cost of repair within 30 days of move out.

Wow! That’s a lot of regulations to keep track of.

Seattle also has tough security deposit laws for landlords.

  • Landlords must return the security deposit within 21 days of move out or send an itemized list in writing for any withholding within 21 days.
  • If a tenant can’t pay the full security deposit at move-in time, landlords must allow payment to be in installments.

Many landlords, rather than risk a tenant lawsuit for possible noncompliance, are simply not requiring a security deposit.

2. Security deposit laws can cost you money

Using Chicago again as an example, if landlords don’t follow the very specific laws, the landlord must pay the tenant two times the security deposit in addition to the security deposit itself. And if a landlord loses a claim filed by the tenant, the landlord must pay the tenant’s attorney fees and court costs.

Ouch.

Some states are also strict with landlords who do not follow security deposit laws to the letter. California, for example, also awards tenants two times the security deposit in addition to the security deposit if the court finds the landlord acted in bad faith. Read your state laws, and you could be shocked.

3. The cost is burdensome to tenants

It can be difficult for tenants to come up with first month’s rent plus security deposit, particularly in high rent areas. If people can’t afford to move into your rental, you could have a difficult time renting it out.

Renters ought to be able to come up with first month’s rent. If they can’t, then they probably won’t be able to pay the rent each month. But adding a security deposit that’s equal to first month’s rent upfront could be tough on some people, particularly if there are other fees involved such as pet fees, utility deposits, and moving expenses.

If you’re finding most people are having trouble coming up with first month’s rent plus security deposit, you might not want to collect a security deposit.

If you don’t collect a security deposit, collect a move-in fee.

Landlords need protection when they rent out property, and that’s the reason for the security deposit. But some landlords collect a move-in fee instead.

You may say this is playing semantics—whether you call it a “security deposit” or a “move-in fee,” you’re still collecting money. But there are differences between the two. You should understand what they are so you can decide whether collecting a security deposit or a move-in fee better suits your situation.

About move-in fees

Most landlords who don’t collect a security deposit collect a move-in fee instead. The move-in fee is typically not subject to as many regulations as the security deposit can be. The reason is that the move-in fee is not returned to the tenant at move-out time. The landlord simply keeps it.

But the move-in fee is usually less than the security deposit. It’s designed to cover the cost of cleaning the rental unit, painting, and making minor touch-ups. Most landlords charge a percentage of the rent, such as 40 to 50 percent.

Which should you collect? A security deposit or a move-in fee?

If you live in a jurisdiction where the security deposit laws are complicated and the penalties strict, you might want to consider charging a move-in fee, dropping the security deposit altogether.

But if you live in a state with straightforward security deposit laws, you’re probably better off collecting the security deposit.

What about collecting first and last month’s rent?

Some landlords collect first and last month’s rent instead of a security deposit. That can get you off the hook for cumbersome security deposit laws. But doing so means you are protected only from a tenant who skips out on paying a month’s rent. You would have to pay for any damages out of your own pocket.

Related: Collect a larger deposit instead of last month’s rent

Bottom line

It’s generally a best practice to collect first month’s rent plus a security deposit. But depending on your situation, you might want to do things differently.

How to get your landlord’s approval to sublet

Written by Laura Agadoni on . Posted in edited, For Renters, paid, Rent & Expenses, Rental Advertising, Screening, Security Deposits

Permission to subletYou just found out you need to be away from home for an extended time. But you’re still in the middle of your lease period. Subletting your rental would be the perfect solution … but what will your landlord think?

Related: A renter’s guide to subletting your apartment

When you sublet, although you’re still a tenant, you act as a landlord by leasing your rental unit to someone else—a subtenant. Whether you’re allowed to sublet your rental is usually addressed in the lease, and you typically have one of three options:

  1. You are not allowed to sublet—game over, end of story. Don’t do it!
  2. You are allowed to sublet. Go for it—you have free rein!
  3. The norm—You are allowed to sublet only after obtaining written consent of the landlord. (Landlords typically want to screen subtenants.

But what if the lease doesn’t say anything about subletting?

A rarity, but if your lease is silent on the issue, check to see whether your state has any laws on the books about subleases. And more important, just ask your landlord.

Keep in mind that your landlord can refuse your request to sublet your rental, particularly if they have a good reason. With that said, there are ways to help ensure you get your landlord’s approval to sublet.

1. Find a suitable subtenant

It’s best to ask someone you know and trust. A dependable person you can rely on both reassures the landlord and gives you peace of mind that this person will uphold their end of the bargain—paying the rent on time, taking care of the property, and following all other lease terms.

If you don’t know anyone who wants to sublet, you can still find a suitable subtenant.

  • Tell everyone you know that you’re looking.
  • Post on social media and Craigslist.
  • Ask if your roommates will do the same—they’re the ones who’ll be living with this person, so it benefits them to find someone.

If you do post the unit online, make sure you list the benefits (basically whatever it is that you like about it). Also include photos, and of course, your contact information.

If you’re having a hard time finding someone, lower the rent or offer to pay utilities. Even if you need to subsidize part of the subtenant’s rent, it will be cheaper than paying all the rent and probably cheaper than breaking the lease.

2. Screen potential subtenants

You can sign up with Cozy as a landlord and have your subtenants apply. (If you are already signed up with Cozy as a tenant, you’ll need to use a different email address.) Request that applicants allow a credit and background check. This lets you know whether they have a criminal record and how they handle finances.

Ask for references, and call them. Ideally, you will speak with their employer and their current landlord.

3. Get your roommates on board

If you have roommates, make sure they’re okay with your subtenant. You don’t want to cause any drama before you leave by surprising your roommates with a stranger suddenly living with them. If your roommates approve your subtenant, have them sign a form stating so.

4. Draw up a lease between you and the subtenant

A written lease makes everything clear, protects both parties, and eliminates your-word-against-theirs types of scenarios.

Here are some must-haves to put in the lease:

  • The dates the subtenant will be renting the unit from you
  • The amount of rent they will pay
  • Whether they will pay the rent to you or directly to the landlord
  • Who will pay for utilities

Also provide your subtenant with a copy of your lease so they will know all the particulars of your rental situation.

A note about rent: You can continue to pay the rent to your landlord even if you have a subtenant, and your subtenant would pay you. This way, you know that rent is being paid. You can also choose to let your subtenant pay the landlord directly. But if your subtenant doesn’t pay, the landlord could evict you (unless you pay rent pronto plus any late fees).

It’s a good idea to ask your subtenant for a security deposit. A usual amount is half or a full month’s rent.

5. Put in a written request to your landlord

Let your landlord know that you are taking this matter seriously by mailing (or at least emailing) them about your sublease proposition at least 30 days in advance.

Here’s what to put in the letter:

  • Your reason for needing to sublet
  • The start and end dates of the sublease period
  • The proposed subtenant’s name and current address
  • Your address (or a way of contacting you) during the sublease period
  • A copy of the sublease agreement and any roommate approval form

6. Wait for your landlord’s response

If your landlord doesn’t respond in a week or so, follow up. If your landlord won’t respond or refuses your sublease proposal for no good reason, you may need to contact an attorney or legal aid.

7. Understand what you’re getting into

You are ultimately responsible for your rental unit.

If you choose a subtenant who is irresponsible and skips out on rent, damages the rental unit, or becomes a nuisance to the point of violating the lease terms, your landlord can come after you for the money.

Make sure you have a clause in your lease with your subtenant that states they will be responsible for unpaid rent or damages they caused. That way, if your landlord sues you or keeps your security deposit to pay what’s owed, you can then come after your subtenant or keep part or all the security deposit if you requested one.

Note that the expectation is to return your subtenant’s security deposit. If you do keep all or part of their security deposit, you need to provide a reason.

A subtenant could save you from paying rent for a place you won’t be living in or from having to break your lease. If done correctly, the arrangement could work out well for all parties involved: your subtenant, your landlord, and you.

If you have tips for subleasing, please share them in the comments!

Cleaning and repair rules when you move out

Written by Kathy Adams on . Posted in edited, For Renters, Maintenance & Renovations, Move-in/Move-out, move-out, paid, Security Deposits, Step 10 - Repair & Maintain

communicationThe last thing you probably feel like doing as you move out of a rental is cleaning the place. Like it or not, though, you’re expected to leave it just as nice as it was when you moved in.

If you leave a dirty place for your landlord, they can hold back the cost to clean up from your security deposit. After all, it is your mess. But the security deposit is your money. You want as much of it back as possible, right? So just what are your responsibilities?

Related: How to get your security deposit back

Read your lease

Besides typical cleanup duties such as washing the floor or vacuuming the carpet, the landlord expects you to do a thorough job of getting that rental back into shape. Move-out expectations vary, so check your rental agreement or lease to see what the landlord wants you to do.

Common cleanup duties

Common cleaning requests include wiping down baseboards, doorknobs, and light switches; dusting ceiling fixtures; washing the windows; and thoroughly cleaning appliances. Some landlords may expect a professional carpet cleaning as well. It’s definitely worth your time to read every move-out detail in your agreement, as some landlords levy extra fees if you don’t take care of an item on the list or if you don’t do it within the specified time frame.

Repair damages

Even minor damage to the rental must be repaired before you hand over the keys. A couple of nail holes may not seem like much to you, but if you don’t repair them, the landlord has to. That means they can bill you in the form of a deduction from your security deposit. Here’s a checklist of things to do:

  • Patch nail and tack holes with a small amount of spackle.
  • Erase scuff marks on walls and floors with a melamine foam eraser, aka a Magic Eraser.
  • Rub a walnut over scratches in wood floors, or fill them in with a wood marker that matches the floor color.
  • Replace anything you may have temporarily removed, such as cabinet hardware you swapped out for something that suits your own style.
  • Go through each room and closet, replacing any light bulbs that no longer illuminate.

Cleaning not your thing? Hire someone

If you choose not to clean and repair everything on the move-out list, there’s still hope. Hire a cleaning company to tackle your checklist. Just make sure you’re available to inspect the space afterwards to make sure they took care of everything. The same goes for repairs. If you broke a handrail off in a stairwell, for instance, and don’t have time to repair it, hire a handyman or contractor to take care of the problem.

Tell your landlord about any damages

Inform the landlord of specific items you can’t fix on your own, such as a broken handrail. Your landlord may ask to see the damage and assess whether they can repair it easily. If so, you may be off the hook. If not, expect a repair bill.

Informing the landlord of potential damage or cleaning concerns is always better than just skipping out and leaving the work for your landlord. If you completely bail on your responsibilities, you’ll probably not get some—or all—your security deposit back.

You might be charged extra for damages

If the damage is beyond minimal, such as missing floor tiles, mold on the shower surround, or massive stains on the carpet, the landlord could charge you more than the amount of your deposit. For instance, if your security deposit is $900 and it will cost $1,200 to repair everything in your unit, you may owe $300 to cover the difference.

Rules for holding back a security deposit

Whenever a landlord withholds any money from your security deposit (including charging you extra), you are entitled to a detailed breakdown of charges. Check your state laws to ensure the charges are legitimate. Common sense also applies; for instance, a $250 charge to fill in three small nail holes is extreme and likely would not hold up in court.

Related: What to do if your landlord wrongfully kept your security deposit

All in all, taking care of a minor aggravation—cleaning your old place—is well worth your time. Besides, you agree to do it when you sign your rental contract. Once you’ve refreshed your old abode, you’ll get your deposit money back, as well as peace of mind, knowing you’re leaving on good terms with your former landlord. On to a fresh start!