As a landlord and property manager I look at security deposits with two different hats from time to time.  I will admit the views can be stark different at times. As a landlord I tend towards the view of maximizing cash and going heavier on security deposit deductions (I’ve had my own management company employees lovingly call me Scrooge McDuck).  As a property manager I lean towards making sure a reputation is not developed for being a company that doesn’t return security deposits or handle them unfairly. I recently went through security deposit boot camp per say. After talking with a colleague and meeting with a real estate attorney I began to see the reality of security deposit confusion regarding normal wear and tear and how in reality it may come down to having a precise procedure in place.

I was one who used to charge for any crumbs in the cabinets even if it was just a few.   Or charge for cleaning the mirror when it wasn’t spotless or dust on the closet shelves.  My attorney called me on it when a tenant decided to contest her security deposit.  I asked my attorney to step in hoping to avoid the hassle of a court case. I was surprised when my attorney informed me that my charges were a bit steep for the condition the unit was left in.  He urged me to settle with the tenant outside of court because he believed a judge would award the tenant more than what the tenant had wanted back.

If you remember back to your school days, your English teacher told you the worst way to give a definition for a word is to define it by using phrases that describe what it is not. I.e. bad definition of liquid would be “It is not a solid matter.”  The Wisconsin State Legislature did not listen to their English teacher: 704.28(3) Normal wear and tear. This section does not authorize a landlord to withhold any amount from a security deposit for normal wear and tear, or for other damages or losses for which the tenant cannot reasonably be held responsible under applicable law. Thank you for….nothing.

Judges in various states have issued opinions declaring that anything a landlord does as a routine procedure for a “make ready” cannot be charged to the tenant if the time or cost was not significantly increased.  This may still seem a little vague but it begins to make sense if you think it out a little. Consider this: If you normally wipe out the kitchen cabinets before a tenant moves in it may not may make sense to a judge if you charge a tenant for a few lone crumbs in a couple of the cabinets.  If the cabinets were sticky, goopey, or every cabinet had multiple crumbs and debris in them then it would be reasonable to charge them. If you normally paint every unit top to bottom after move-out, you may not be entitled to withhold money for scuffs or hand prints on the walls. If the tenant’s child left their interpretation of Picasso as finger painting on the bedroom wall, you can charge.  The key to remember is: if it adds significant time to your routine procedures then you may have grounds for charging.

Yet the key to having a smooth move-out and security deposit return goes beyond knowing normal wear and tear versus damage.  A smooth move-out begins days before the tenant moves in. In the next blog, we will look at security deposit procedures that will save you hassle and grief.