Oh, such a mess this can be.
I don’t know about other cities, but in NYC and LA it seems like you’re pretty much expected to kiss your security deposit good-bye once you’ve handed it over to the management company. I’ve been fairly lucky at getting my deposits back thus far, but have never been able to do so without a considerable amount of wrangling.
I recently received an email from a reader describing the difficulties she’s had in getting back a 3-month (eek!) security she and her roommates put down on an apartment. I sent her questions over to my mother, who’s a lawyer specializing in landlord/tenant and real estate matters to see if she had any tips for those of you who might find yourself in a similar situation, and she sent back some great info, including advice on how to handle small claims court (if it gets that far).
If you’re living – or planning to move into – a rental apartment, this is definitely worth a read.
Q. Hi Jordan! I love your blog, and was hoping you might have some advice on how to deal with a difficult management company who doesn’t want to return your security deposit.
At the end of May, I moved out of my 3 br apartment that I occupied for 3 and a half years. We were model tenants (truly) – always paid our rent on time, didn’t cause problems, etc. I expect to get my full deposit (which is equal to 3 months rent – not the standard 1 month, so I’m pretty eager for that money to get in my bank account pronto) back since there was no damage, no one inspected the apartment at the end of my lease, and I haven’t been notified of any reasons for withholding.
Since early June, I’ve left numerous voice mails and sent several emails, and all went unanswered. Finally, I went to their office and was told that they have 45 days to return the deposit (which, at that point, was 4 days away).The 45-day deadline came and went, and then I was told that they needed another 10 days. Ultimately, I agreed to the additional days because I want to be reasonable and I don’t know what else I can do. That deadline passed last Friday and, not surprisingly, I haven’t heard a peep from them or seen a check. I’m planning to pay them another visit, but I’m wondering what my options are. I’m considering taking them to small claims court, but is there any other recourse I have? This is frustrating because I’m totally at their mercy, and in honesty, I think they’re just hoping that I end up forgetting about it.
1. The only basis to keep any part or all of a security deposit is if there is damage to the apartment caused by the tenant or for unpaid rent. The security deposit cannot be used to pay for “normal wear and tear”, i.e., cleaning and painting. Of course, if you painted your walls black, or red, or some other unapproved color, the landlord would charge to paint them back the neutral white or cream color.
2. The security deposit is considered to be the property of the tenant, and the landlord is only holding it in escrow, in the event of damage to the apartment. The security deposit is required by law to be held in an interest-bearing escrow account if it is more than $750 or if the building has 6 or more apartments. The landlord is required to notify the tenant in writing of the amount of the security deposit and the bank where it is being held. That information is usually included at the top of the standard form of apartment lease. If it is not, the tenant is entitled by law to return of all of the security deposit, irrespective of whether there is any damage or other basis to retain the deposit. The landlord is allowed to keep 1% as an administrative fee, but the balance of the interest earned is to be returned to the tenant.
With regards to this particular situation, you should call (or preferably write a letter or email) to the management company one last time and threaten to turn the matter over to your attorney if they don’t give back the money immediately. Don’t let them say they’ll mail it. Go pick up the check. If you know who the landlord is, copy the landlord on the letter.
3. Unfortunately, if they don’t cooperate and give back the money, you may have to resort to small claims court (if it is $5,000 or less). This is something you can do yourself: Go down to 111 Centre Street and fill out a complaint. The clerk will mail it to the defendant, and give a court date. You then bring all your evidence (lease, cancelled check, photos) and testify as to the amount owed to get a judgment. If it is more than $5,000 you will have to bring an action in Civil Court and may want to get an attorney to help with that.
4. Presumably, the management company is a corporation. If so, they will have to hire an attorney to represent them in any court action (a corporation is not allowed to represent itself). Threatening to go to court usually will result in getting the money back since they would not want to incur the expense of an attorney to defend them.
5. I don’t know of anything that says they have 45 days to give back the security deposit. That may be their own made-up rule, unless there is something in the lease that says so.
6. Although too late in this instance, since you have already moved out, it is generally a good practice to take pictures of the empty apartment when you leave, to be able to prove that there was no damage. Shelves, dangling or exposed wires and large holes (from picture hangers) would be considered damage, so those things should be taken care of by the tenant. If you have put up wallpaper, or painted in colors that were not approved by the landlord, you should restore the walls to their move-in color/condition. The best practice would be to get the managing agent to come to the apartment and do a walk-through together before you leave. Get a written acknowledgement of no damage . Tell them you’ll pick up the check the next day. If there is damage, insist on a written estimate of the cost of repair.
7. One other point, if you plan to do any renovations to a rental apartment, you must get written approval from the landlord in advance. Even if you think you are improving the apartment – e.g. replacing ugly old kitchen cabinets with nice new ones, that would be considered “waste” and under the lease you could be evicted unless you were able to put back the old cabinets. I know, this sounds strange and unreasonable, but under some circumstances a landlord could use this as an excuse to evict to get a higher rent from a new tenant, especially if the apartment is rent stabilized.
– Bonnie Berkow, Wagner Davis P.C.