A landlord will need to write a denial of security deposit letter to a tenant for damages when some or all of their security deposit will not be returned. If landlords do not follow the correct legal process, they jeopardize their chances of using a security deposit to cover the cost of damages (like that hole in the wall from the tenant’s friend Kevin, a mega 49ers fan, after that very loud Super Bowl party).
We’ve outlined what steps to take if a letter does need to be sent, as well as ways to avoid the potentially complicated situation of keeping a portion of a tenant’s security deposit. You can also jump to a sample letter to the tenant for damages here.
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Sample Letter to Tenant for Damages + Things to Keep in Mind
Landlords are legally allowed to collect security deposits in every state and may use all or a portion of the deposit to cover any damages caused by the tenant that exceed normal wear and tear. The law also states that landlords are required to return security deposits in full or notify tenants if a portion of their deposit has been withheld.
It is important to know your state’s landlord-tenant laws, as the specifics vary from state to state. Generally a landlord must send a physical letter that includes the security deposit returned in full or that details why they are keeping some or all of the security deposit. This must be done within so many days (generally 14–60) of the tenant’s departure. In most states, if a landlord is keeping a portion of the security deposit, they must provide an itemized list of deductions. It is helpful to provide detailed descriptions along with bills and receipts when possible.
Below is a sample landlord letter to a tenant for repairs that exceed the security deposit. Feel free to print this out and use for your own purposes.
Download a Letter to a Tenant for Damages
Our letter is in a pdf format, and easy to print and fill out.
How to Avoid Having to Ask a Tenant for Damages
Asking a tenant for damages can be challenging as it is time-consuming, and there is even the possibility that the tenant will refuse to accept responsibility. Furthermore, a landlord could potentially find themselves having to demand additional funds in order to cover damages that exceed the amount of the security deposit.
In order to avoid these situations, landlords should always take the following steps as a precaution:
1. Do Your Due Diligence on Prospective Tenants
Do a background check
A background check assists landlords in learning more about an individual’s past. It is important to be aware of a prospective tenant’s criminal history in order to avoid renting to someone that is dishonest or even dangerous.
Run a credit report
A credit report can give a landlord insight into a prospective tenant’s finances. A landlord will want to ensure a prospective tenant is financially responsible and has a history of making payments on time. Individuals that have a history of being late on payments or debt may be less willing or able to pay for damages.
Invest in an eviction report
An eviction report provides details that may not show up on a credit report or criminal background check, such as the specific reasons for eviction. The tenant may have broken rules such as being too loud at night or housing a pet. Keep in mind evictions only stay on an individual’s public record for up to seven years.
2. Keep Accurate Documentation
Tenants should do a walk through with the landlord prior to moving in so that both parties can document any existing damages. Similarly, both parties should do a walk through before a tenant moves out so they are able to discuss any new issues in person. It is recommended that landlords not only do inspections before a new tenant moves in and while they are moving out, but also every few months while the tenant is occupying the space to document any ongoing issues.
A rental inspection checklist is very useful for assessing and keeping track of any damages to a property. This document will detail any existing issues to the property, which allows both tenants and landlords to understand who is responsible for what damage. This significantly reduces the risk of disputes.
What If Damages Exceed the Security Deposit Amount?
If the tenant’s damages exceed the security deposit amount, you may want to consider sending a demand letter. This letter not only notifies the tenant that you will not be returning any of their security deposit, but also demands additional funds from them. When demanding more money it is critical to have detailed, accurate documentation. This is especially important if you end up taking a tenant to small claims court if they refuse to pay.
Landlords should always weigh the pros and cons of taking a tenant to court. It is likely only worth taking this action if the amount owed is significant, there is proper documentation of damages, and the tenant has the financial ability to pay. If not, it is probably not worth spending the time and money required to take a tenant to court.