A bit of normal wear and tear in your rental property is to be expected. What if the damage goes beyond what's reasonable?
Rental security deposits are one of the most common protections against significant damage that landlords have. However, how much you charge and when you withdraw money from a tenant's security deposit is not at your discretion.
In Nashville, landlords need to comply with Tennessee security deposit laws at all times. Read on for our complete guide to security deposits in Nashville and how to operate within the law.
How Much Can You Charge?
Landlords typically collect security deposits when the tenant signs the lease or, assuming the two are different, on move-in day. In Tennessee, you may charge up to the equivalent of one month's rent for an unfurnished apartment. If you are renting out a furnished apartment, the maximum increases to the equivalent of 1.5 month's rent (e.g., $1500 if the rent is $1000).
When Are Security Deposit Refunds Due?
Tenants only need to give you one security deposit regardless of how many times they resign your lease. No matter how many lease terms a tenant remains in your unit, you'll have 30 days from the time they move out to return their security deposit. You have the same number of days to let them know that you are not returning it (or not returning it in full).
When Can You Retain Security Deposits?
You can only retain a tenant's security deposit (in part or in full) to cover specific expenses. These include:
- Unpaid rent
- Excessive cleaning expenses
- Excessive repairs
Landlords will need to use their discretion in defining excessive expenses and repairs. Keep in mind that if a tenant believes you're violating security deposit laws, they can challenge you in court.
What Do Tenants Need to Know?
If you're going to retain all or part of a tenant's security deposit, you need to provide specific documentation. Specifically, you need to create an itemized list of costs (e.g., "professional carpet cleaning, $350"). You will need to send this itemized list to the tenant's new mailing address by certified mail or hand deliver it.
What Other Fees Can You Charge?
Tenant security deposits aren't the only source of financial protection landlords can build into their leases. For example, you can charge a pet deposit or a non-refundable pet fee (though this does not apply to assistance animals). You can also charge late fees for any rent payments you don't receive by the deadline designated in your lease.
Need Help with Security Deposits?
As a Nashville landlord, security deposits are one of your best defenses against significant damage and unpaid rent. However, it's your responsibility to operate within state security deposit laws. If your investment properties aren't your only work obligation, how can you stay up to date with local and state tenant rights?
We're here to provide the rental expertise and hands-on help you need to turn your rental properties into a source of passive income. Contact us to learn more about our full-service property management approach and why it's a favorite amongst Nashville investors.
