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What to Do If the Security Deposit Doesn’t Cover Tenant Damage?

What to Do If the Security Deposit Doesn’t Cover Tenant Damage? | Irvine Property Management - Article Banner

California security deposit law limits what you can collect when a tenant is moving into your Irvine rental property. Usually, if you’ve done some good tenant screening and you’ve maintained an excellent professional relationship with your residents, you can count on a move-out process that’s efficient. There may be some wear and tear left in the property and perhaps minor damage that’s easily covered by the security deposit. 

What if the damage is so extensive that it costs more than the deposit to make the necessary repairs and replacements in order to re-rent the home?

That’s the fear of many Irvine rental property owners. We understand it, and do everything we can as Irvine property managers to eliminate the risk.

Preventative Measures During the Tenancy

A good way to deal with tenant damage is to avoid it. The condition of your property should not be a complete surprise when your tenant moves out. Here’s how you can prevent any damage from making your turnover process frustrating and expensive:

  • Screen tenants thoroughly. Check credit for any indication that there’s been a lawsuit filed by former landlords. Talk to those former landlords when you gather rental references. Ask if there was damage, if enough notice was given before the tenant moved out, and whether they’d rent to that tenant again.
  • Conduct at least one maintenance walk-through during the tenancy. You want to take a look at how your tenant is caring for the property. While you cannot enter an occupied home without cause, you can do a maintenance check when you include this in your lease agreement. 

That’s what you should think about before the tenancy begins. If it’s over now and you’re left with damage, the best things you can do is document what is owed and then try to collect it.

Documenting Tenant Damage in your Irvine Rental Home

Tenant damage needs to be documented in a move-out condition report. You should compare the report and the supporting photographs and videos to the condition report you made during the move-in process.

When you’re documenting the damage, take a lot of pictures. You may have found large holes in walls, broken appliances, doors off their hinges, broken windows, or huge gashes on walls and floors. Maybe there’s writing on the walls or a lot of trash that has been left behind. You want to make sure you’re able to prove the damage so you can lawfully keep the tenant’s security deposit. 

Using the Security Deposit and Sending an Invoice

Deduct the amount of damage from the security deposit your tenants paid before moving in. You need to send an itemized report within 21 days, even if you’re keeping the entire deposit. Pull that together and include the amount that’s due which is not covered by the deposit. 

You’ll want to send your tenants a bill for anything outstanding. Realistically, you may never see that money, unless you’re willing to hire an attorney or a collections firm. This might be worth the time and effort, especially if thousands of dollars are owed. 

Try communicating with the tenant. Let them know you’ll be putting all your efforts into collecting what is owed. Send the lease agreement language that reflects tenant responsibilities regarding the condition of the property and the move-out process. 

It’s rare that the damage is so significant it surpasses the amount of the security deposit. However, it does happen. You can mitigate this risk by working with professional, experienced Irvine property managers. We’d be happy to help. Contact our team at HCM Property Management.

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