How Security Deposits Should be Handled on Your Beaverton or Portland Rental Home
Our blog topic today is Security Deposits 101. The first thing a homeowner needs to know when preparing a property for the rental market is that a security deposit is 100 percent refundable to the tenant when the home is left in the same condition that it was received. You have to be prepared to return that entire security deposit to your renter; it’s not your money.
In today’s marketplace, collecting the equivalent of one month’s rent for a security deposit seems to be the standard. That is typical, but you have the right to charge a bit more if you need to. For example, during the course of your tenant screening you might come upon an applicant who has poor credit or a rental history that causes some concern. In those cases, it’s acceptable to charge more than the standard one month’s rental amount as a security deposit.
As a property owner, you are not required to open up a separate or special bank account to hold your tenant’s security deposit. However, property management companies are required to have a separate account for security deposits. Those tenants’ funds cannot mingle with the regular business accounts of the company.
Something else you need to know about security deposits is that it’s perfectly acceptable to charge a pet deposit. When a tenant is moving in with a dog or a cat, you can charge an extra deposit in addition to your security deposit. However, you cannot charge any sort of pet deposit when a tenant is using a service animal in the home.
It’s important to pay attention to deadlines when it comes to returning the security deposit to the tenant. After the tenant moves out, you have 31 days to return the security deposit to your tenant. That includes mailing time consideration. If a property owner fails to return the security deposit or illegally withholds any part of that deposit, the tenant can sue to recover twice the amount of the security deposit that was paid.
Be very careful with your security deposit process, because you don’t want to make a mistake that will cost you money and headaches in court. If you have any questions about how to handle a security deposit, or you’d like to hear more about Portland Property Management and our process, please contact us at Property Management Systems, and we’d be happy to help you.