When does a property owner have the right to keep the security deposit and when don’t they? I’ll answer that question in detail today.
The topic of the security deposit is one I’ve previously covered, but it warrants further discussion. From my experience, nothing is more hotly contested or talked about in property management than security deposits, and problems often arise on both the tenant and owner sides.
When and for what reason can a security deposit be kept? This is often a source of contention between tenants and owners, and I’d like to shed some light on this for owners: Security deposits can only be retained for damages or a broken lease.
Let’s first consider a situation where damage might be involved. Say a tenant is moving out of the unit in a timely fashion, but there is damage left behind. The onus lies with the owner to give notice and quotes for repair costs to that tenant within 14 calendar days.
“Security deposits can only be retained for damages or a broken lease. “
We as property managers hold the security deposits, so if an owner is not letting us know what’s going on and not acting within that 14-day window allowed by law, it’s punishable in civil court by up to three times the penalty. That two-week window takes effect the day the tenants turn in their keys.
Now, what if a tenant breaks their lease? If, for any reason, a tenant decides to leave the property prior to the lease’s end, property management reserves the right to retain the security deposit.
For any questions about what I covered today, whether you’re an owner or a tenant, go ahead and give your HI Pacific property manager a call. They’d be happy to share their knowledge of the 29-page landlord-tenant code with you.