Security deposits are regulated by law for landlords, so it’s important that you understand the requirements and comply with the deadlines and timelines. There are a few things to think about when you’re collecting security deposits at the beginning of a lease and returning the deposits at the end of a lease.
Documenting the Property’s Condition
Really good documentation is required before a tenant moves in and after a tenant moves out. This goes way beyond simply having written notes. Your documentation should include really good photos or a video that can show the exact condition of the home. Make sure you are equipped to compare how the house looked before your tenants moved in and how it looked after the lease ended.
Sign a Strong and Detailed Lease
You need to have a clearly defined lease. It should include information on how much of a security deposit you collected and what the tenants need to do to get that security deposit returned. Your lease should explain how you expect to get your house back. Having this in place ensures you and your tenants are on the same page, and it also ensures that you can take money from the security deposit when certain things are not done before moving out.
Deadlines for Returning Security Deposits
According to New Mexico law, landlords have a 30-day period to return the security deposit or provide a disposition. If you’re going to keep some or all of the deposit, you need to provide an accounting of those funds.
Make an itemized list of the charges that reflects the money you plan to keep. If your tenant owes you more than the amount of the security deposit, you can file separately with the court system so you can get that money back.
Security deposits can be complex. If you have any questions about how to manage them, please contact us at [email protected]
Credits: Photo by Mohamed Hassan