WHEN DEPOSITS DON’T COVER THE LOSS Most landlords have experienced some version of this scenario. A tenant leaves owing rent, or the property needs more repairs than expected. You apply the deposit, but it only covers part of the damage. From there, your options are limited. You can try to recover the balance through small claims court, but collection is another issue entirely. As reported by the Consumer Financial Protection Bureau, even when landlords obtain a judgment, collecting from tenants without sufficient income or assets can be difficult. Collection agencies are another route, but they often take a percentage of what they recover and don’t guarantee results. Some landlords charge their new tenants both a security deposit and a move-in fee. Choosing whether or not to charge a move-in fee and setting an appropriate amount is an important part of the rental process. Even if you fairly assess move-in fees and security deposits, dealing with the aftermath of a destructive tenant can be an expensive headache that can often be avoided by conducting an AAOA tenant background check and credit screening. In other words, the deposit is helpful, but it’s not a complete solution.
EVEN IF YOU FAIRLY ASSESS MOVE-IN FEES AND SECURITY DEPOSITS, DEALING WITH THE AFTERMATH OF A DESTRUCTIVE TENANT CAN BE AN EXPENSIVE HEADACHE.
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