Security Deposit Cases in Small Claims Court
What you need to know from a tenant and landlord's perspective
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Disagreements about whether a landlord properly withheld all or part of a tenant's security deposit account for a large percentage of the landlord-tenant disputes that end up in small claims court.
Problems involving security deposits often arise like this:
- The tenant moves out, making what the tenant considers to be a reasonable effort to clean the place,
- the landlord keeps all or part of the deposit, stating that the place was left damaged or dirty, and
- the tenant is furious, claiming the landlord is illegally withholding the deposit.
If the tenant and landlord can't reach a compromise, the tenant's best remedy is to sue the landlord for the money withheld, leaving it up to the small claims court judge to decide who is telling the truth.
Whether you're a tenant filing a case or a landlord defending one, it's important to understand state law on security deposits.
State Deposit Laws
State law often dictates how large a deposit a landlord can require, how it may be used, when and how it must be returned, and more. In some states, landlords must offer to perform a "pre-move-out inspection," which gives tenants notice of–and time to fix–damage or uncleanliness, thus avoiding a deduction. In most states, it is up to the landlord to prove that dirty or damaged conditions justified keeping all or part of a deposit. Often, state law also provides that if a deposit is not returned within a specified time after the tenant moves out (usually somewhere between 14 and 30 days, depending on the state), the tenant is entitled to receive the entire deposit back.
If the landlord acted in bad faith in retaining the deposit (by deliberately and unjustifiably withholding the deposit despite repeated requests to follow the law), the tenant may be entitled to extra ("punitive") damages over and above the actual amount of the withheld deposit. Whether the tenant actually gets these extra damages is up to the judge. After checking your state's rule (use our website at www.nolo.com/legal-research/state-law.html), which may specifically describe the conduct that will support a request for punitive damages, you may decide to ask for those extra damages.
Deposit Cases From the Tenant's Point of View
How should a tenant prepare a case involving a landlord's failure to return a deposit? Ideally, preparation should start when you move in. Any damaged or dirty conditions should be noted in the lease or rental agreement, or an attached inventory or checklist, both of which should be signed by both you and the landlord. You should also take photographs of substandard conditions and have neighbors or friends look the place over. When you move out and clean up, you should do much the same thing–take photos, have friends (or another tenant in the building) check the place over, keep receipts for cleaning materials, and, once the place is cleaned up, try and get the landlord to agree in writing that it is in satisfactory condition or that the earlier noted areas of damage are all there is.
Now let's assume that you are a tenant, and your former landlord has not returned your $900 security deposit even though you moved out more than three weeks ago, having paid all your rent, given proper notice, and "passed" the move-out inspection. Start by writing the landlord a letter like this:
Sample Letter Demanding Security Deposit
October 25, 20xx
Dear Mr. Anderson:
As you know, until September 30, 20xx, I resided in Apartment #4 at 1700 Walnut Street and regularly paid my rent to your office. When I moved out, I left the unit cleaner than it was when I moved in. During the move-out inspection, you told me the place looked fine.
As of today, I have received neither my $900 security deposit nor any accounting from you for that money. Please be aware that I know my rights under [state law] § [xxx]. If I do not receive my money within the next week, I will regard the retention of this deposit as showing "bad faith" on your part and shall sue you, not only for the $900 deposit plus interest, but also for the $1,800 punitive damages allowed by law. May I hear from you soon?
Be specific when requesting the return of a deposit. If your landlord has returned only part of your security deposit, deducting more for cleaning or damages than you thought was reasonable, your demand letter should detail exactly why you believe the deductions were improper. For example, if the landlord says a door was damaged and cost $200 to fix, you might claim that the work could have been done competently for $75. If you get no satisfactory response from your landlord, file your case.
Whom Should Tenants Sue in Security Deposit Cases?
A tenant who knows who owns the building should sue this person or business. However, sometimes it is hard to know who to sue, because rent is often paid to a manager or other agent instead of the owner. In most states, multiple occupancy buildings must have ownership information posted on the premises, or list the name of the owner (or the owner's agent for purposes of suit) on the lease or rental agreement. If you are in doubt as to who owns your unit, you are probably safe if you sue the person to whom you pay your rent.
On court day, a well-prepared tenant should show up in court with as many of the following pieces of evidence as possible:
- Photos or a video of the apartment showing how it looked when you moved in, including any dirt or damage that already existed. (If you don't have these, it's not fatal; if you do, it helps.)
- A copy of the pre-move-out inspection report, if one was done.
- Photos or a video of the apartment showing clean conditions when you moved out.
- A copy of an inventory of conditions upon moving in and moving out, signed by the landlord and tenant, if one or both was prepared.
- Receipts or canceled checks for any cleaning supplies used in the final cleanup.
- A copy of your written lease or rental agreement.
- A copy of a demand letter to the landlord, such as the sample set out above, showing that you made the required demand before suing.
- One or, preferably, two witnesses who were familiar with the property, saw it after you cleaned up, and will testify that it was in good shape. Incidentally, the testimony or written statements of people who actually scrubbed an oven or toilet are particularly effective. If you also have a witness who saw the place when you moved in and who will say that it wasn't perfectly buffed (or that damage already existed), so much the better.
The Landlord's Perspective: Defending Deposit Cases
Your best protection against spending hours haggling over security deposits is to follow the law scrupulously when a tenant moves out. It is your responsibility to return the deposit within the number of days legally required or explain why you are withholding some or all of it. But no matter how meticulous you are about properly accounting for your tenants' deposits, sooner or later you may be sued by a tenant who disagrees with your assessment of the cost of cleaning or repairs. This section shows landlords how to defend themselves in tenant-initiated small claims court cases.
Within the time limit set by your state's law, after inspecting the premises and documenting any dirty or damaged conditions, send the tenant a written itemization of deductions for repairs, cleaning, and unpaid rent. Include details on the costs of any cleaning or damage repair, including a reasonable hourly charge if you or your employees do any necessary cleaning or repainting, and an itemization if work is done by an outside firm. Keep receipts for costs of repairs such as new carpets or repainting. If you use an outside cleaning service, ask the service whether they will testify in small claims court, if necessary, or at least write a letter describing what they did in detail in case the tenant contests your deposit deductions.
Before your court hearing, you should gather all the evidence you have that the premises needed cleaning or were damaged. It's important to understand that you, the landlord, have the legal burden of proving these facts. If you fail to do that, the tenant will win. In other words, all a former tenant needs to prove to win is that a residential tenancy existed, that he or she paid you a deposit, and that you didn't return all of it.
To make a winning case, a landlord should show up in court with as many of the following items of evidence as possible:
- Photos or a video of the premises before the tenant moved in, showing how clean and undamaged the place was.
- Photos or a video taken at the pre-move-out inspection, if any, and then after the tenant left, that show a mess or damage.
- Copies of inventory sheets (if any were prepared) detailing the condition of the rental unit when the tenant moved in and out, signed by the landlord and tenant. (These are particularly valuable if they show that an item that is now broken was in good shape when the tenant moved in.)
- A copy of your written lease or rental agreement.
- An itemization of hours spent by you, or your repair or cleaning people, working on the unit, complete with the hourly costs for the work.
- A copy of the written security deposit itemization(s) (pre-move-out and post-move-out) you sent the tenant, with details about the deductions.
- Any damaged items that can be brought into the courtroom (for example, a curtain with a cigarette hole would be effective evidence).
- Receipts for professional cleaning or repair services.
- One, or preferably two, witnesses who were familiar with the property, saw it just after the tenant left, and who will testify that the place was dirty or that certain items were damaged. People who helped in the subsequent cleaning or repair, or the new tenant who saw the place before you cleaned it, are likely to be particularly effective witnesses. Written statements or declarations under penalty of perjury can be used, but they aren't as effective as live testimony. A sample written statement is shown below.
Declaration of Paul Stallone
I, Paul Stallone, declare:
1. I am employed at A & B Maintenance Company, a contract cleaning and maintenance service located at 123 Abrego Street, Tucson, Arizona. Gina Cabarga, the owner of an apartment complex at 456 Seventh Street, Tucson, Arizona, is one of our accounts.
2. On May 1, 20xx, Gina asked me to go to the premises at 456 Seventh Street, Apartment 8, to shampoo the carpets. When I entered the premises, I noticed a strong odor, part of which seemed like stale cigarette smoke. An odor also seemed to come from the carpet.
3. When I began using a steam carpet cleaner on the living room carpet, I noticed a strong smell of urine. I stopped the steam cleaner, moved to a dry corner of the carpet, and pulled it from the floor. I then saw a yellow color on the normally white foam-rubber pad beneath the carpet. I also smelled a strong urine odor, apparently caused by a pet (probably a cat) having urinated on the carpet. On further examination of the carpet, I noticed similar stains and odors throughout the carpet and pad.
4. In my opinion, the living room carpet and foam-rubber pad underneath need to be removed and replaced and the floor should be sanded and sealed.
5. I declare under penalty of perjury under the laws of the State of Arizona that the foregoing is true and correct.
DATED: June 15, 20xx
The Landlord's Perspective:
Suing When the Deposit is Depleted
Most of the security deposit cases in small claims court involve tenants arguing for their return, and landlords defending their use of the money. Occasionally, landlords go to small claims court as plaintiffs, when the departed tenant has left damage or dirty conditions that the security deposit can't cover entirely. For example, if your tenant leaves you with $2,000 worth of damage and cleaning, but the deposit comes to only $1,500, you'll be out of pocket $500 unless you sue.
Few landlords pursue tenants in small claims court over relatively small amounts for three very good reasons: Either they can't find the tenant, the amount at issue isn't worth their time and trouble to go after, or they know the tenant is "judgment-proof" and won't be able to pay anyway. But if you're in the rare position of knowing where to find your departed tenant, the tenant has some wherewithal, and the amount at issue is significant, you may wish to file.
Prepare your case, this time as a plaintiff, in much the same way as you would prepare a defense to deposit withholding, described in the section above. You'll need the same kind of evidence–proof of damage caused by this tenant (it must not be preexisting) along with invoices from a repairperson or cleaning establishment documenting the money you had to spend to deal with the mess. You'll also need to prove that you collected a specific sum as a security deposit. If the security deposit available to you, minus proper deductions, does not cover the legitimate expenses you incurred in cleaning or repairing, you'll have met your burden. It will be up to the judge, of course, to determine whether your expenses were needed, or whether they fall within the regular refurbishing that all rentals need to remedy the normal wear and tear that all tenants cause.