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How to Properly Handle a Security Deposit Return in Phoenix

System - Friday, March 6, 2020
Property Management Blog

How to Properly Handle a Security Deposit Return in Phoenix - Article Banner

The security deposit is collected from your tenants before they move into your rental property and begin the lease term. The same deposit is returned at the end of a lease, after the tenants have moved out and you’ve established whether there was any damage to the property or remaining unpaid bills for which your tenants are responsible.

As experts in Mesa property management, we understand security deposits extremely well. It’s important that you handle and return them properly, otherwise there can be expensive legal consequences.

Mesa Property Management and Move-Out Inspections

Tenants are required to provide you with notice that they will vacate the home at the end of the lease term. Once they have moved out and you have regained possession of the home, you’ll need to conduct thorough move-out inspection.

If you’re working with a Mesa property management company, you can expect that your property manager will walk through the property and take careful notes as well as pictures to document the condition of your property. This inspection report will be compared to the notes and photos that were taken during the move-in inspection, before your tenants began living in the home.

Your or your property manager will compare the condition of the property at move-in to the condition after move-out. Any necessary charges will be deducted from the security deposit at this point.

Mesa Property Management and Security Deposit Deductions

A good example of an acceptable deduction would be if the tenant didn’t return the unit in a clean condition or if your lease agreement specifies that they must professionally clean the carpets before leaving, and they didn’t. If there’s damage like large holes in the walls or broken appliances, you can deduct for the cost of repairing those things. Deduct the amount for repairs and cleaning that you’ll need to do, and then send the remaining sum to the tenants. If you aren’t making any deductions, the tenant will receive a full refund of the security deposit. Make sure you get a forwarding address before your tenant leaves so you’ll know where to send it.

Arizona Law and Security Deposit Timelines

Arizona has a strict timeline to process and return a security deposit and/or a disposition letter. The disposition letter is simply an accounting of how all or part of the deposit was applied. You have to return the deposit or send the letter within 14 business days of a tenant moving out. Your Mesa property management company will ensure this deadline is met and if you’re managing on your own, make sure you pay attention to the date. If you miss the 14-day mark, the tenant can sue you for three times the amount of the deposit that was wrongfully withheld.

This timeline is business days, not calendar days, but it’s still quite short compared to many other states. If there are damages that require bids from vendors, you’ll need to send out an estimated disposition within those 14 business days. If the final amount is different than the estimate, you’ll need to send the tenant a revised final version once the work is complete and paid for.

Mesa Property Management Provides Protection

security depositManaging the security deposit is one excellent reason to work with a professional Mesa property management company. Things get complicated when it comes to returning the security deposit if the tenant’s move-out is due to a lease break or an eviction. Usually, the tenant will owe you money in these circumstances. But, you still have to process and send the disposition within those 14 days. If you don’t have a forwarding address for the tenant, you’ll have to send it to their last known address.

Any letter should be sent via certified mail, so that it can be traced and the date of mailing verified.

Professional property managers have procedures in place to keep your property protected.

If you have any questions about security deposits in Phoenix or Mesa property management, please contact us at Bennett Property Management. We’d be happy to help.