Many people don’t know that if you fail to return your Tenant’s security deposit within the time frame allotted by your particular state . . . there can be some very serious consequences. As an example, let’s assume that your state mandates that you are to return your Tenant’s security deposit to them within 21 days (3 weeks). In many states, if you fail to return the deposit within that time frame then first, you will lose the right to charge the Tenant for anything! It doesn’t matter if your Tenant owes you for three months of rent, late charges and they tore up your property . . . by returning the money late . . . you waive your right to charge the Tenant for anything at all. But wait . . . there’s more! Also, in many states if you miss the deadline, your Tenant is entitled to TWO TIMES the amount of security deposit. Translation: if the Tenant paid a $2,000 security deposit and you miss the return date, you could have to pay them $4,000 AND not be able to charge them for any back rent or late fees owed or for repairing any damage they may have done to your property! So be sure to check the specific laws in your state. A good place to start is to google “tenant landlord laws (insert your state’s name)”
This tip is part of the scores of information contained in our Property Management Training Program; Manage to Make Money . . . . the Real Estate Series. This new series has been developed around our book: Manage to make Money . . . Your Guide to Profitably Managing Rental Properties 2nd Edition.
To view a short video about returning security deposits click on this link.
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