Most landlords will require tenants to pay a security deposit as part of the initial moving costs. In North Carolina, how much you can charge tenants will depend on the length of the lease term. For instance, if it’s longer than month-to-month, the most you can charge them as a security deposit is 2 months’ rent.
This amount, however, may not be sufficient to cover the potential liabilities that may arise during a tenancy. Examples of such liabilities include unpaid rent and/or damage exceeding normal wear and tear. So, what should you do when the deposit doesn’t cover unpaid rent? In this article, we’ll walk you through everything you should know in this regard.
Most leases require tenants to return their rented premises in the same condition they found them in, less normal wear and tear. If the tenant doesn’t, you may be able to make appropriate deductions on their deposit.
Please note that you can only make deductions on damages exceeding normal wear and tear. Common examples include unapproved paint jobs, missing tiles or floor boards, or damaged windows. You may also be able to make further deductions if the tenant left the property in a dire state of uncleanliness. If the damages exceed the security deposit amount, the next step to make is to send them a demand letter.
This will, of course, be in addition to withholding the tenant’s security deposit. The demand letter should include some important information for it to be effective including:
Make sure to use a professional, respectful tone when writing the demand letter. Also, ensure that you send the letter properly. Preferably, via certified mail with a return receipt for documentation purposes.
There is no guarantee that the tenant will honor the demand letter. In such a case, you can consider legal recourse. Ideally, you will want to file the lawsuit in a small claims court. This is especially true if the value of the lawsuit doesn’t exceed $10,000. From start to finish, you can, generally, expect the process to take two to three months. That being said, suing a tenant isn’t always a straightforward process.
Keep the following in mind:
Landlords know that inspecting their property is great for their bottom line. When you regularly inspect your rental property, you’re able to monitor its condition and make requested or needed repairs. This not only makes the tenant comfortable, but also ensures the property is up to code.
During the inspections, make sure to be on the lookout for:
Make sure to schedule rental inspections per local regulations and the lease agreement. Also, make sure to provide the tenant with an advance notice before entering their rented premises.
Before the tenant can move out, make sure to do a walk-through of the premises. Take note of any damages the tenant may have caused during their tenancy. If the tenant has caused damage exceeding normal wear and tear, provide them with an itemized list of issues and the cost of repair. Then, give them some time to make the repairs before the final walk-through inspection.
Whether you’re just getting started, are living out-of-town, or already have a full-time job, hiring an expert can save you potential headaches and help you maximize return on investment. Some of the things a professional property manager can help you with include:
With our expert tips, now you know what to do should the deposit fail to cover unpaid rent. Just make sure to handle the situation as professionally and respectfully as possible. For expert help in managing your rental property, look no further than Dawson Property Management. We take pride in providing comprehensive leasing and rental home solutions to property owners in Charlotte and the surrounding areas. Get in touch today to get started!
