Tenants complain about security deposits and some landlords don’t think they should charge them. This post will cover why a security deposit is important for a landlord -- and a tenant -- and the best way to handle them.
What is a Security Deposit for?
Before a tenant moves into a property, they will often pay a refundable security deposit to the landlord that they will receive at the end of their lease, minus deductions for damages. In Missouri, a landlord cannot charge more than two months rent as a security deposit. The security deposit can only be used to pay for repairs from actual damages (not normal wear and tear), unpaid rent or lost rent due to the tenant moving out without adequate notice. For more info about security deposit laws and requirements, be sure to read Missouri’s Landlord-Tenant Law.
Why Should I Collect a Security Deposit?
This security deposit is a landlord’s safety net. It allows the owner to repair the property in the case of tenant damages. This way, a landlord doesn’t have to come out of pocket, and the tenant can receive that money back if they treat the property well. Additionally, you may find that by requiring a security deposit, you will attract better, more responsible tenants. If a tenant can lose money from causing damages, they are less likely to cause damages.
How do I Determine Deductions?
One of the biggest minefields of property management is deducting from the tenant’s security deposit. As a responsible landlord, it is imperative to know what will be considered normal wear and tear. Normal wear and tear on a property is damage that occurs naturally when anyone is living in a property, often things like worn carpet, settling cracks and scratches on countertops would occur at any time, with any tenant. It’s also important to remember that you can only charge for a repair to a property, not an upgrade. For example, if a tenant has broken the white refrigerator, you cannot charge the tenant to upgrade it to a stainless steel model.
Managing a rental property is difficult, and handling a security deposit is tricky. The best way to ensure you are following all Missouri law and your property is protected is to hire a quality property management company. Check out our free guide to hiring a property management company in the Fort Leonard Wood area here!