One of the most contentious issues that tenants and landlords grapple with in their rental relationships is the final stage -- the move out -- especially the security deposit return portion of the move out process. I have tried to play out some of the issues with the following three scenarios. I encourage you to review them.
Tony and Marc, Students
Tony and Marc were high school friends. They decided to go to law school together and decided to live off campus in an apartment. It was a two bedroom, two bath apartment for $700 a month. They shared the rent, security deposit, and all of the utility expenses on a 50/50 basis.
After a couple of months Tony met a girl, Margaret, who ended up moving into his room with him. Marc was okay with this for a while, but when Margaret started telling him what to do, he told Tony that he was not happy and Margaret needed to stop. She did not stop, and Marc moved out to live in another apartment by himself. Margaret was very pleased with herself, and promptly bought a small dog to keep her company when Tony was studying.
Marc did not give notice to his landlord, nor did he get his half of the security deposit back. At the end of the lease year Tony moved out of the original apartment. The landlord inspected the unit and billed Marc and Tony for cleaning, painting, carpet cleaning, repairs plus a $500 fine for sneaking in a dog. The costs to the landlord of getting the unit rent ready for the next tenant plus the fine totaled $1,300. This used up the total security deposit plus $600. Letters were sent out to both Marc and Tony. Marc went ballistic.
He called the landlord and said that he had moved out after one month and demanded his security deposit back. The Landlord refused claiming that he had rented to both of them and that they were equally responsible -- especially in light that Marc had not notified the Landlord that he had moved out.
Marc decided to sue the Landlord in small claims court. The Judge ruled that Marc and Tony were both responsible for damages to the unit, but he excluded wear and tear. The Landlord was entitled to bill for pet damage (if any), and the $500 fine. The Judge decided that the Landlord could not charge for painting and cleaning because those items fell under wear and tear (ORS 90.300.4. a. and b). In the end, the Landlord was only able to justify costs of $700, but was able to keep the entire security deposit.
Jolene from South Carolina
After escaping Hurricane Hugo, Jolene, a single mom, was happy to find a small house to rent in Northeast Portland. She settled herself and her two elementary school-aged children in the small house, filling it with donated furniture where her meager belongings left off. The rent was $800/month with an $800 security deposit.
She signed a one year lease with the landlord and went about enrolling her children in school and finding herself a job. Within two weeks she was working full time. Her kids would come home at 3 p.m., do their homework and together they would make dinner at 5:30 p.m. She was thankful that she had a home, and a job and that her kids were safe.
After a couple of months she met a young man at work and they started dating. They really enjoyed each other's company, and it was not unusual for her to miss out on supervising her kids. And kids being kids, (and artistic to boot), they started drawing on the walls. The pictures were fantastic. Jolene thought they were great and actually supported their drawing on the walls. She was so happy with her new boyfriend that nothing would bother her. She was also too busy to clean the house because they were together exploring Oregon all weekend long.
After one year they decided to move in together, so Jolene told the landlord she was not renewing her lease. On move out day the Ella, the Landlord, came for the check out visit and to pick up the keys. She was horrified. All of the walls were drawn on, the floors were filthy, the kitchen was marred by a grease fire the kids had started when they cooked for themselves, and the carpet (albeit older when they had moved in) was now torn and filthy. Ella could only shake her head in dismay. She took pictures and Jolene knew then that a bill would be coming for the repairs.
Jolene was shocked by the list of repairs:
Cost of carpet $1500
Cost of cleaning and painting walls $1500
Cost of repairing fire Damage $500
Redoing the landscaping $1000
Minus the Security deposit: $800
Total Owed: $3700
She refused to pay, claiming that she was not responsible for wear and tear (ORS 90.300.4.b.) Ella responded by taking her to small claims court and showing the judge the pictures before and after. The Judge ruled for Ella under ORS 90.325. 1 and 6, (Tenant Duties for Reasonable Care), pointing out that Jolene had not even tried to take care of the house and that the costs were reasonable. The judge did however discount the cost of the new carpet by $400 because it had been older when Jolene had originally moved in. Jolene had to pay Ella $3300.00 which she did with 10 monthly payments of $330.00.
Tatiana from Croatia
Tatiana and her parents were new immigrants to America. She had learned English in her native Croatia, but was rusty at best. She was the leader of her family, and at 15 that was a great responsibility. Her number one job was to find housing for her family through the auspices of IRCO, Immigration Refugee Center of Oregon.
She found a small two bedroom apartment that was in good condition. The management company toured it with her upon their move in and Tatiana and her parents agreed to pay a $500 dollars security deposit, plus the $600 a month rent. She was excited when they moved in.
Everything worked. The water heater gave hot water, all the range burners operated, the toilet flushed, and all of the heaters worked too. She was happy. This was better than anything she had experience back home. She helped her father and mother find a job and then she want to school. After three years of living in America, they had saved enough money to buy a house, so they moved out.
Two weeks after they moved out, they received a letter from the management company explaining to them that they had moved without giving notice, and that the security deposit would be forfeited. In addition they owed for the balance of a month's rent ($150) because the rent had increased over the three years they had lived in their apartment. Since they left the unit in immaculate condition, there were no other costs for which they were responsible. To help Tatiana understand, the management company had included a copy of the rental agreement in the letter highlighting their responsibility as tenants in Oregon to give 30 days notice on a month to month tenancy.
This was blow to Tatiana who prided herself on being perfect, but once she reread the document she understood she needed to pay and sent in the $150 check.
These tales are examples of day to day issues landlords and tenants face, regarding the refund of security deposits. Bear in mind there are many rules that apply in addition to the ones noted here, such as notices to Landlords regarding move out, return of keys to Landlord signifying the end of tenancy, and timeframes regarding statements to tenants regarding damages to rental property.