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Tenant Threats about Security Deposits

Todd Ortscheid - Thursday, March 26, 2015

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.

Doing repairs yourself?

Todd Ortscheid - Sunday, April 06, 2014

On occasion we get a new client who is dead set on doing his own property repairs, or having his own vendors take care of them. We certainly have no problem with this, because we generally don't make any money on property repairs, but there are some pitfalls that owners should be aware of if you decide to go this route.

First, when you're dealing with renters, you need to worry about liability. While most tenants are not looking to make a quick buck off of a lawsuit, there are always scammers out there. A scammer can come up with all sorts of claims, from claims that a vendor left a door unlocked and property was stolen, to claims that a repair was done in a shoddy fashion and the tenant suffered injury as a result. When you are doing the repair yourself, you and your insurance will have to deal with this sort of litigation if it comes up. You could also have a fly-by-night vendor that you're using to save a few dollars, and some of them can be scammers just like tenants, claiming that they slipped and hurt themselves while on your property, or claiming that the tenant's dog bit them and wanting the homeowner to pay for it, etc. When dealing with a rental property, liability is always something to be thinking about.

When you have us handling the repairs, you don't need to worry about this. First, we use licensed and insured vendors, and we make them keep a copy of their liability insurance policy on file with us so we can verify their coverage. Second, we have our own general liability insurance. And finally, scammers look for a point of least resistance. A large property management company is not an easy target for a scammer, because they know that our attorneys can easily deal with their litigation. When dealing with an individual owner, though, that seems like a pretty easy target to them.

You also should be concerned about quality of the work performed. Your rental property is either an ongoing investment, in which case you want it in the best possible condition so as to appreciate in value as quickly as possible, or it's a home that you are only renting temporarily while you wait to return, in which case you want it in the best possible condition for you when you move back in. Either way, you don't want shoddy work done on your home or your investment. We spend tens of thousands of dollars a month on repairs because of the large number of portfolios that we manage, so we know the vendors who do good work. We can make sure that your property is in good hands, while you might be taking a shot in the dark.

And finally (and perhaps most importantly for some), price is an important consideration. Because of the bulk amount of work that we provide to various vendors, we are able to get the best possible pricing on labor. One example that we frequently provide is a hot water heater, which is one of the highest priced repairs that owners frequently deal with. If you were to hire a reputable company to replace a hot water heater for you, you would likely be spending between $1,200-1,500. By contrast, we can usually get it done for you for well under $1,000, including our commission. Another example would be an air conditioning system. Along with roof or foundation repairs, this is about as expensive as repairs get outside of natural disasters. We've seen HVAC contractors try to charge owners as much as $5,000 to install a new air conditioning system. This is highway robbery compared to what we can usually get for you. We can get even a brand new heat pump system installed for a little more than half that price. Long story short, it is highly unlikely that you'll be able to find a reputable vendor to do the work for a lower price than we can get you. Sure, you may be able to find some guy on Craigslist who will do it for less, but he won't be insured or licensed, and you probably don't want him touching your investment.

Again, we are always more than happy to let our clients handle repairs in any way that they choose. We don't lock anyone into using our vendors. But we think you'll be far better off allowing us to handle them for you.

GTL Real Estate
120 Village Circle
Senoia, 30276

(678) 648-1244

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