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Loss Recovery Tips for Your College Park Rental Home Management Plan

Loss Recovery Tips for Your College Park Rental Home Management Plan

Losses can come in many forms, lost rent, damages, or unexpected lease breaks are just a few examples. How to handle these losses is an integral part of your College Park rental home management plan. Learn important distinctions regarding damages plus how to recover the loss by legally withholding rent below.

What Are Security Deposits and How Do They Work?

Security deposits are typically 1 to a maximum of 2 months’ rent. These monies are held in escrow per the rental agreement to protect the landlord against forms of tenant default. When tenants vacate, the landlord has up to 45 days to return the deposit to the tenant with interest. This may either be the full deposit or a lesser amount depending on the condition of the property. If the landlord fails to return the deposit within the 45 days, a tenant could potentially sue them for up to 3 times the deposit plus fees. So, as a landlord, maintain proper records and have a system in place for returning funds promptly.

Lawful Reasons to Withhold Security Deposit in a College Park Rental?

Lawful Reasons to Withhold Security Deposit in a College Park Rental?

  1. Abnormal Cleaning Costs
  2. Unpaid Rent
  3. Outstanding Utility Bills
  4. Damage (above normal wear and tear)
  5. Early Lease Termination

Steps to Lawfully Withholding a Deposit

Unlawfully withholding funds or not returning them within the legal timeframe causes a landlord unnecessary trouble. To prevent potential issues, thoroughly research local laws, and follow these simple steps below.

  • Intent to Vacate Notice: When the tenant intends to move out, they will notify their landlord in writing.
  • Schedule Move Out Inspection: Tenants have the right to be present along with the landlord for the move out inspection. Therefore, notify the tenant of the scheduled date and time. This inspection should take place no more than five days after move out, sooner if possible.
  • Complete the Move Out Inspection: This needs to be a detailed checklist and walkthrough to note the condition carefully. Additionally, photographs and a video walkthrough to further document issues is a great idea.
  • Determining Damages: Landlords can hold the tenant financially liable for any damages above normal wear and tear.
  • Gather Estimates and Make Repairs: Obtain several estimates for more extensive repairs and save all receipts and invoices. This documentation provides evidence to support withholding from the security deposit.
  • Notice to Tenant: With damage discovered, the landlord must notify the tenant of their intent to withhold all or a portion of the deposit. Therefore, landlords must mail a detailed list of damages plus an invoice or receipts of actual repair costs. Again, this must happen within the 45 days after move out, or the landlord forfeits their right to withhold.

Tips for Preventing Security Deposit Disputes in Your College Park Rental

Unfortunately, disputes will happen even with the best preparation and practices. That said, there are several things landlords can do to minimize risk as part of your College Park rental home management strategy. Check out these helpful suggestions below on preventing future issues.

Tips for Preventing Security Deposit Disputes in Your College Park Rental

  1. Have a Well-Written Lease: A well-written lease is a key to success in property management. Terms need to be clearly stated and agreed upon, especially regarding the security deposit. Per Maryland law, landlords must provide a written receipt of the security deposit form in addition to the lease. Not doing so may result in fines.
  2. Complete a Thorough Move-In Inspection: Create a Move-In and Move-Out Checklist to inventory household items as well as conditions for each room or area. Take plenty of pictures! A thorough move-in inspection gives you a baseline for comparison when it comes to move-out condition.
  3. Create a Standard Cleaning and Repair List: Notifying tenants of what you will charge for and how much at the beginning of their residency has its advantages. This sets the tone for the condition you expect to find at move out and is excellent for items like “Replacing Missing Blinds: $40”. Beware of listing large items though, if the repairs end up being more expensive, you will have a difficult time getting more than the amount you listed.
  4. Keep Excellent Records: It goes without saying, but it is crucial to have detailed and accurate records of all communications, receipts, and contracts in the event a dispute arises.

Conclusion

Reclaiming losses has the potential of being a tricky process. Use these tips to ensure your College Park rental home management plan includes strategies for handling these unexpected losses or disputes. Need help managing your portfolio of investment properties? A PG county property management company can guide with rental property management in Washington D.C. metro and surrounding counties.