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I've sent my ex-tenant their security deposit (nothing withheld) and they have confirmed that they received it. However, it's been more than a month and they have not cashed it in.
I have no intention of using what is their money or cancelling the check, but what are my obligations if the tenant does not cash in the check?
Eventually they will not be able to deposit that check if they wait more than 90 days. This tenant was known to leave the country for months at a time and I'm assuming that is what has happened and I'm assuming they'll forget about cashing the check (They've "forgotten" to arrange for on time payment of rent during these times as well). I have sent a few emails reminding them, but I get no response and I do not think it is my responsibility to remind them of getting their money.
My accounts will always have this debit pending until they cash it in. Is there some law where after a certain period of time, the tenant is considered to forfeit their security deposit after a certain period of time in Nevada?
My checks have a preprinted validity statement saying it expires after 90 days. However, I believe you are correct that the banks will still most likely accept the checks long after that.
Afterall, if the check is cashed and it has been cancelled, the bank wins by charging the depositor for cahing a bad check. That being said, I don't cancel my checks unless they are lost or stolen.
Found this from the Nevada Uniform Commercial Code:
NRS 104.4404 Bank not obligated to pay check more than 6 months old. A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than 6 months after its date, but it may charge its customer’s account for a payment made thereafter.
(Added to NRS by 1965, 851)
Well I'm not too worried about the check .. the tenant can always ask for a new one.
However, my question is more geared towards what should happen to the security deposit if they never attempt to cash it or contact me for a new check? That amount will be in lingo on my accounts for some time which I don't want.
Its based on a preset time period, so after the state statutory time period for it to be honored (lets just say 6 months) checks that fall into this period from Dec through NOv are to be turned over to the state the next June or july. Contact the Nevada State Tresurure and they will tell you what forms and how to transfer the unclaimed security deposit to them. The tenant will have 3 years from the date the funds would qualify for transfer to the state file a claim for the money with the State. If you transfer the funds to the state as required, the tenant will collect from the state. If you didn't do it, you can find yourself being sued for tens of thousands in damages plus hefty fines. In most cases tenants seldom come back thinking because they didnlt cash the check they are out of luck, but some smart person could find out about the law to turn the money over to the state and are hoping you don;t and they come back suing for big damages.
It says you need to wait 1 to 3 years before you hand the "unclaimed property" over to the state. I've emailed them to get clarification on my specific situation ... I'll update this post if required.
why not contact them and remind them the check will expire at the end of 90 days? Seems pretty simple to me...
Koale
I believe I mentioned I have contacted them and they indicated they got the check. I'm not going to bug them about it because I did my part in reminding them and insuring they got their check from me ... in writing.
We mailed the security deposit of $ 2500.00 to the tenant within days because the property was left in great condition and they were good tenants, but there was something strange....
After a little over 90 days I received a message from BoA that the money was returned into my account for not cashing the check within 90 days.
After I had issued the check to the tenant I received paper work requesting if there was a security deposit since the tenant had filed for bankruptcy and if so, that money should be going towards the debt the tenant had. I informed the court that i already had issued the money and that i couldn't do anything about it...
BUT when the money came back I informed the court about it...
THAN....! the tenant walks into our office with the check and asking me for a new one since "he forgot to cash the check since he was so busy he had a bunch of check that he forgot to cash and now the bank was not taking it anymore since the 90 days were expired"!
I told the tenant about the court request and that I had to issue the money now towards the bankruptcy...
The tenant told me that his lawyer would contact me since this money should not be included towards the bankruptcy and later he called me that his mother in law who lived with them, had written the check so it was clearly not something that should be incl. in the bankruptcy and he demanded a new check.
We emailed him a copy of the security deposit check which was in his and his wife's name and not in his mother in laws name and we never heard back from him or his lawyer...!
The money went towards the people he owed money to and his "well thought scam" of waiting until the bankruptcy was over didn't work out the way he wanted it...
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suggestion...
