Landlord Q & A: Returning roommate deposits
March 1, 2011
Q: One of the two roommates in my rental moved out and wants half the security deposit back. Do I have to return it?
A: Probably not. Unless you agreed otherwise, the two room mates created one tenancy. The tenancy exists until both parties move out. The best way to proceed is if a new roommate moves in that he or she pay the roommate who moved out his share of the deposit directly.
With a new roommate moving in, you might be tempted to hang on to the first roommate’s deposit until you receive the one from the new roommate. Don’t do it. Every state has requirements as to how long a landlord has to return or account for a security deposit. What happens if you don’t get a deposit from the new roommate until that time has passed? Since you said you’d return half the deposit, a court would probably construe that as your recognizing that the security deposit was dividable.
A situation which would change that would be if you collected separate security deposits from each of the roommates when they moved in. In that case, you’d probably have to return or account for the security deposit within the time frame required by law.
How would you do that? When one moves out do you bring the property back to the standard it was when you first rented it? How could you do it with someone still living there?
Make sure each roommate tenant understands about when the security deposit will be returned when he or she moves in. Do it then and you don’t have the recriminations and problems when one vacates.
About the Author: Bob Cain
Some 30 years ago Bob Cain went to a no-money-down seminar and got the notion that owning rental property would be just the best idea there is for making money. He bought some. Trouble was, what he learned at the seminar didn’t tell him how to make money on his rental property. He went looking for help in the form of a magazine or newsletter about the business. He couldn't find any.
Always ready to jump at a great idea, he decided he could put his speaking and writing skills to work and perform a valuable service for other investors who needed more information about property management. So Bob ferreted out the secrets, tricks and techniques of property management wherever he found them; then he passed them along to other landlords.
For over 25 years now, Bob has been publishing information, giving speeches, putting on seminars and workshops, and consulting for landlords on how to buy, rent and manage property more effectively.