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Hello All,
A year ago, the management company (that I used) collected a cashier's check from the new tenants (they are A and B). This check includes 1st month rent, security deposit of $1,500, and some other fees. Two months later, that management company quit due to the property is far from their office. They gave us the rental documents they have. On the Move-in/Move-out inspection list, there's handwriting acknowledge accepting that cashier's check. Their computer system print out shows tenant A deposited the security check.
Now one year lease is up at the end of this month (February). And the tenants no longer get along with each other. Tenant A moves out at the end of this month. Tenant B informed me that she will not stay for long but for now it's month to month.
Each tenant asks to take the security deposit back. I then asked the management company for a copy of the cashier's check to see whose name is on it. But the company didn't answer.
I then asked the tenants separately via texts to see if they're OK if I give half of the security deposit back to tenant A (if no damages to the property found) on the move-out walkthrough having both the tenants and myself at the house. Tenant A said he's OK with my solution meaning he will accept half of the deposit. Tenant B didn't answer clearly. She asked back why she has to give me half of the deposit when we'll do the walkthrough. I explained to her that after I give half the deposit back to tenant A, I need to collect her half in order to have a whole month of deposit because she's staying. No answer from her.
A week passed by, today tenant B texted me a picture showing $3,000 she sent to tenant A right before they occupied the house. I answered her that's not the lease agreement between the tenants and the management company. That's between her and tenant A. She said 'I know that's my bank statement, that's my proof. But okay".
My question is what should I do. Should I continued to give half of the security deposit to tenant A as I have said to each tenants via texts a week ago?
Thanks a lot.
That $3,000 has nothing to do with you or your PM unless this tenant can prove they paid $3,000 to the PM.
If this tenant gave their portion of the deposit to the fellow tenant and the fellow tenant used one check (with only their name on it) to pay the PM, then they need to get their portion back from the fellow tenant.
The whole deposit goes back to who paid it.... who’s name is on the cashiers check?
It is pretty simple. Who is on the original lease? If they are both on the original lease the security deposit belongs to both of them. You are correct to do a walkthrough and return the deposit back to both of them minus any damage charges because the lease has ended.
You are entering into a new agreement with tenant B and now need to collect a new security deposit from that tenant if they want to continue to rent from you.
I have been through this situation several times. It doesn’t matter if tenant B conveniently doesn’t understand it. If they want to stay they have to pay the new security deposit. They can’t force their former roommate who has no further obligation under the lease to pay it for them. If I was given this kind of pushback I’d simply say goodbye to them both and find a brand new tenant.
I disagree with Kim. It doesn’t matter who paid the original deposit. It goes back to all the tenants on the lease. How they decide to allocate among themselves is not your concern. Write a check to both of them and let them figure it out. Collect a new deposit from the new/old tenant under the new arrangement.
And technically tenant A isn’t owed anything until the unit is properly vacated. Because you’re not obligated to return anything until you regain possession. So make them both vacate fully, return the deposit to them both and treat tenant B as a new tenant if you want to allow them to continue to rent from you. Maybe telling tenant B that’s what you need to do will make them understand better.
Who’s name is on the cashiers check that was given to the PM for the security? That’s who the deposit is returned to. If both paid in, then the one getting the deposit back, owes the other one and it’s between the two of them.
That $3,000 you were shown has nothing to do with you or the PM unless that person can prove that they paid that money the PM directly. It’s only proof that she gave that money to her roommate.
Landlords in my area do it two ways... one check for the deposit that was made up by all tenants contributions or separate checks from each tenant making up the deposit.
Return the deposit to whomever paid it snd let them fight it out in court or as suggested, come to agreement, in writing, and move on.
Edited: I posted twice thinking the first post didnt go through.. that one will be deleted.
It is pretty simple. Who is on the original lease? If they are both on the original lease the security deposit belongs to both of them. You are correct to do a walkthrough and return the deposit back to both of them minus any damage charges because the lease has ended.
You are entering into a new agreement with tenant B and now need to collect a new security deposit from that tenant if they want to continue to rent from you.
I have been through this situation several times. It doesn’t matter if tenant B conveniently doesn’t understand it. If they want to stay they have to pay the new security deposit. They can’t force their former roommate who has no further obligation under the lease to pay it for them. If I was given this kind of pushback I’d simply say goodbye to them both and find a brand new tenant.
I disagree with Kim. It doesn’t matter who paid the original deposit. It goes back to all the tenants on the lease. How they decide to allocate among themselves is not your concern. Write a check to both of them and let them figure it out. Collect a new deposit from the new/old tenant under the new arrangement.
And technically tenant A isn’t owed anything until the unit is properly vacated. Because you’re not obligated to return anything until you regain possession. So make them both vacate fully, return the deposit to them both and treat tenant B as a new tenant if you want to allow them to continue to rent from you. Maybe telling tenant B that’s what you need to do will make them understand better.
Both names on the lease. I don't want to start a new lease especially tenant B said she will not stay for one more year, only month to month. Can I add an addendum to the now expired lease that tenant A is no longer at the property. And since both names on the lease, can I write a check for half of the security deposit minus damage charges to tenant A and then collect half of the deposit from tenant B since she's staying? Thanks.
Tenant B signs a new lease....period....she can work out the issue of the deposit with the soon to,be ex roommate since they made that mess. Even a month to month can have a lease. The terms are changing and you need that piece of paper for protection.
Both names on the lease. I don't want to start a new lease especially tenant B said she will not stay for one more year, only month to month. Can I add an addendum to the now expired lease that tenant A is no longer at the property. And since both names on the lease, can I write a check for half of the security deposit minus damage charges to tenant A and then collect half of the deposit from tenant B since she's staying? Thanks.
No you cannot.
You have a choice. Either wait until everyone moves and you get back possession. Then write a check with both names on it. Same as what your lease said.
Dont get involved in the tenants problems. They work it out not you. Just tell them this is what you have to do.
If they want to have one tenant pay the other tenant 1500.00. And both agree in writing that just one tenant gets back the full 3K then fine. That is the only option. But who cares you follow the rules.
Only other way is start a brand new lease on MTM terms with one.
You have a choice. Either wait until everyone moves and you get back possession. Then write a check with both names on it. Same as what your lease said.
Dont get involved in the tenants problems. They work it out not you. Just tell them this is what you have to do.
If they want to have one tenant pay the other tenant 1500.00. And both agree in writing that just one tenant gets back the full 3K then fine. That is the only option. But who cares you follow the rules.
Only other way is start a brand new lease on MTM terms with one.
Can I do this: since the security deposit is part of the lease which has two names on it, this deposit can't be returned for now just because tenant A is leaving. I only return it when all the tenants leave the property. However, on the day tenant A leaves, I can do a walkthrough with both A and B. And have them sign an addendum stating these:
1) tenant A is no longer at the property as of March 1
2) the rent remains the same and tenant B is responsible to pay it on the 1st day of each month.
If both on lease write one check made out in both names.
Pay to the order of-John Smith and Jane Doe.
Have them both come by office at same time and pick up/sign receipt.
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