‘Tis the season to return security deposits and while many DIY landlords cringe at the thought of their departing residents not agreeing with their depo$it return, professional property managers have “tips” for doing it RIGHT.
NUMBER 1: Whether your business is an LLC or a corporation, name your attorney as the “registered agent” with your state corporation department. When looking for the proper person to serve court documents on, state web sites are the first stop. If the registered agent is an attorney it tells the plaintiff/tenant 2 things...1) since the registered agent is an attorney, their suit probably won’t go forward in Small Claims Court; and 2) that their landlord/property manager will be represented by an attorney....both good.
NUMBER 2: Have the departing residents provide their forwarding address to you on a size #10 business envelope...the only 2 times in the last decade that I have had to stop payment on a deposit return check, the tenant gave the WRONG forwarding address to me. If they have to provide it themselves, there is no argument that it is their fault and I take a 20% service charge (allowed in my lease) for the process of stopping payment and reissuing a security deposit check.
NUMBER 3: Most states require an itemization of the deductions from the security deposit and while there are trade association (LAZY) forms available, I have my own form called
MOVE OUT CLOSING STATEMENT * 2014 * Offer in Compromise
on which I itemize the deductions for CLEANING, YARD, REPAIRS, DELINQUENT RENT, LATE FEES, NSF FEES, NOTICE FEES and my 20% SERVICE CHARGE allowed in my lease. At the bottom of the form, under my signature is the following:
This check/statement is tendered as an offer in compromise for the settlement and return of the security deposit held on the Tenant/Payee’s tenancy. This offer does not waive, relinquish or diminish the right of the Agent or Property Owner to seek additional monies should the Tenant/Payee reject this offer in any way including but not limited to the filing any legal action with regard to Tenant/Payee’s tenancy.
THIS WORDING is an Offer in Compromise meaning the departing tenant takes the check and cashes it or they HOLD the check UNCA$HED and sue me which brings them to NUMBER 1....and probably gets you a 1-STAR review on Google or Yelp.....don't worry, would-be clients will see that you will protect their property when you manage it and know that you are a PRO!
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
"...to be a Virginian, either by Birth, Marriage, Adoption, or even on one's Mother's side, is an Introduction to any State in the Union, a Passport to any Foreign Country, and a Benediction from the Almighty God...." Anonymous