Welcome to Atlanta Area Property and Management; serving the entire Atlanta Metro Area. There are very strict laws regarding the handling of security deposits. These laws can get an owner in lots of trouble, and if you make a mistake, fines and penalties can apply.
By law, security deposits belong to the tenant. As an owner, it’s not money for you to spend. This is money the tenant allows you to hold in case there is damage to the property. Security deposits can be any amount, but most Atlanta property management companies require security deposits to be the same amount as the rent.
Rent Security and Property Condition Reports
Security deposits cannot be collected without a property condition document. The law says that the tenants must do a walk-through of the property so they are aware of the condition of the home. You need to document that this was done, and give the tenant the opportunity to note any existing damage. At the end of the lease, another walk-through with the tenants will allow you to confirm the damages that were caused by the tenants. Then, you can keep the funds that are required to repair that damage. You cannot keep any part of that security deposit without providing the tenant with a written document outlining the damages and costs to repair them.
Security Deposits to Hold Property
Many owners take a security deposit from the tenant to hold a property if the tenant is moving in at a later date. This is unlawful and can cost you triple the amount of the security deposit in fines, plus anything else the judge imposes. Instead, collect a reservation fee that allows you to remove the property from the market and hold it for the tenant. If the tenant decides not to move in, you can keep the reservation fee as damages. But if you collected a security deposit and the tenant decides not to move in, you have to return the money to the tenant or you can get sued. If you do get sued, you will lose.
There’s a lot to know about security deposits. Tenants get very angry if any part of their deposit is not returned. Let us help you stay out of security deposit trouble. If you have any questions about the deposit law or anything pertaining to property management, please contact us at Atlanta Area Property and Management.