If you've been a landlord for long, you've probably dealt with tenants who left the property owing money, either for repairs or for unpaid rent or late fees. Obviously, the reason that a landlord requires a security deposit is to cover these amounts. But when a landlord withholds the deposit as he's supposed to, tenants frequently start throwing around threats about getting lawyers and filing lawsuits. What should you do when this happens?
First, it's important to make sure that you've followed the law and the lease agreement. If the tenant really does have a legitimate dispute, then you should work to resolve it fairly. This is rarely the case, though. Usually the landlord has complied with the lease and the law, but the tenant is still demanding their deposit back.
So after you've confirmed that you're within your rights, the next step is to send the tenant a response to their dispute in writing. Make sure that the response is written in a professional manner and not as an angry diatribe. If the tenant has angered you with their accusations, then take a break and come back to write the response after you've calmed down. If the matter does end up in court, you want to make sure that you looked like a consummate professional. Judges do factor that in and will make assumptions about you if you behave unprofessionally. In your response, just state the facts about what the lease says regarding return of the security deposit, and clearly state why the security deposit was withheld.
If the tenant still doesn't relent, and starts making threats about hiring a lawyer, then don't worry. We hear this constantly from angry tenants, and 99% of the time, they never hire any lawyer and never file any lawsuit. They're just trying to scare you. Ask yourself this: if the tenant couldn't even afford to pay their rent or pay for the repairs to get the property ready for move-out, how are they going to afford a lawyer or court costs? Just calmly tell the tenant that you will be more than happy to speak with their attorney, because you know that any attorney will see the facts and realize that you have complied with the law and lease. That will almost certainly be the end of it.
In that incredibly rare occasion when a tenant actually does file a lawsuit to try to recover their deposit that they are not entitled to, you can either defend yourself in court or hire an attorney. We would recommend hiring an attorney, but there is no requirement to do so in most jurisdictions.
Obviously, the best way to avoid these problems is to hire a professional property manager, like us. When these problems come up, we take care of them so you don't have to, and we have a team of attorneys to deal with frivolous litigation. Give us a call to talk to us about how we can help you so that you don't have to worry about these tenant problems.