Avoiding Security Deposit Blues

Writer  / Jeffrey Heinzmann

Do you have a rental property in an Indiana college town that you lease to students for the year? Do you have children in college renting off-campus housing that they’ll soon be vacating after the school year to return home, head to a summer job, travel or join the “real world” workforce? If you are on either side of this equation, it’s important to remember to protect your interest regarding the security deposit that was probably paid as part of the lease.

Tenants, your lease likely has terms regarding termination, like when to give notice that you will be leaving and your obligations regarding cleaning and maintenance. What’s important for the security deposit return is that you provide the landlord with your forwarding address in writing. Once that is done, the landlord will have 45 days from the date you provided the address or the date you surrendered possession of the property and terminated the tenancy to return or account for the security deposit.

Landlords, you took that security deposit to protect yourself. If you do not handle it properly, you could lose not only the right to claim damages against the deposit, but also attorney fees for an effort by your former tenant to recover the deposit.

Once the tenancy has ended and the tenant has provided you with a forwarding address, you have 45 days to return the deposit or to send an itemized statement listing all damages claimed for which the deposit may be used. You must include the estimated cost of repair for each damaged item, along with a check or money order for any remaining amount of the deposit, if any.

A landlord may only apply the security deposit to certain damages. Allowable damages include actual damages to the rental unit or any ancillary facility that are not the result of normal wear and tear (the lease might proactively identify some of these damages, including painting, carpet cleaning, etc.), delinquent rent, rent due for early termination of the lease if the lease provided for the last payment of rent, and utility or sewer charges the tenant was responsible for but failed to pay.

If the landlord fails to return the deposit or fails to provide an itemized statement that includes item-by-item estimated costs along with any remainder of the deposit to the tenant within 45 days, then the tenant may bring an action (likely in small claims court) against the landlord for the entire deposit plus attorney’s fees.

Jeffrey Heinzmann is an attorney with Heinzmann Law Office, www.heinzmannlaw.com.