The National Credit Report

 Security Deposits...What You Need to Know

The new year brings along new legislation regarding Security Deposits.   The law states that within a reasonable amount of time, following notice of termination or expiration of a lease, the owner or agent must inform the tenant as to their right to obtain a report as to the condition of the property upon move-out.  This report is to provide the tenant with the opportunity to correct any problems that may lead to a reduction in the return of their Security Deposit.   The actual inspection of the unit may not take place earlier than 2 weeks prior to the termination date.

 

It is recommended that the owner/agent be pro-active with this requirement…do not assume, if you have not heard from the tenant, they do not want to take advantage of this option.  The tenant can claim that the request was made and that, somehow, the owner/agent didn’t respond.  Make it a matter of procedure to contact the tenant following the initial notice and ask if they intend to request the inspection report.  If the tenant is interested in having the inspection report, then arrange a mutually accepted date and time for the inspection that does not exceed 2 weeks prior to the actual date of termination.

 

Finally, one must know that this legislation also requires that the owner/agent give the tenant a 48 hour notice prior to the inspection!  This 48 hour notice must be presented to the tenant in writing.  At the time of the inspection, it is extremely important to document all citations.  Following the inspection, a report must be prepared for the tenant that includes a “Statement of Deficiencies” if there is any amount to be withheld from the Security Deposit.  There are three instances in which the deductions may be made:

 

-If the deficiencies are not repaired between the time of inspection and date of termination

 

-If new deficiencies arise following the inspection (document, document, document!)

 

-If you could not inspect the unit due to the location of personal possessions (for example:  newspapers piled floor to ceiling, large pieces of furniture covering floors or walls, etc.)  

 

 

 

Legal Review: Rent Collection

A law passed in 2002, provides for the individual or entity (owner) that is to be paid rent payments, to be named, including their address, in the lease agreement.  Also, to comply with this law, your document needs to name the party that is responsible for collecting the payment from the tenant, usually the resident manager. 

 

In addition, it is now mandatory to include the method and manner in which rent is to be paid.  There are five options for describing this: personal delivery only, mail only, personal or mail delivery only, electronic funds transfer, or direct bank deposit.          In speaking with a local attorney, the last two options, electronic funds transfer and/or direct deposit, are not recommended as they do not allow the manager a “proven paper trail” without bank assistance.  Another issue with the method of payment is that should you choose personal delivery only, you must include the usual days and hours during which the manager is available.  You must be careful with this assertion, as the tenant can claim an attempt to make payment during said times and fault may lie with the manager if they are unavailable as stated.   Also, if you choose mail delivery only, the tenant need only prove in court that he/she deposited payment into a mail box within 3 days of a 3 day notice and it is a conclusive assumption that the rent has been paid.  Therefore, the best, and most comprehensive choice for method and manner is the personal OR mail delivery option.

 

*** As always, NCR recommends that you consult your Attorney for questions and/or implementation of any legislation***