At Progressive Property Management, we have been leasing and managing homes in California long enough to know that whoever has the most accurate documentation in small claims court usually wins. If a tenant is bringing a claim against you or disputing the return of a security deposit, your documentation is going to save you in court. The most important piece of documentation you will have is the form you used during the move-in and move-out inspections.
Move-In Inspection Documentation
The move-in inspection form has to be completed and signed by both the owner and the tenant. This is the document that establishes the condition of the rental home when the tenant takes initial possession. It is the baseline condition report – it establishes the “before,” and it will be compared to the move-out documentation, which is the “after.”
This form needs to be more than a vague paragraph. It should be extremely thorough and detailed. It should include a photo of every room, preferably of every wall, door, floor, and ceiling. If there are any flaws or problems, they should be clearly documented.
Even better than photos is a video. When you can provide video documentation of the entire premises, you’re in possession of proof that’s hard to dispute. On the move-in inspection form, notes can be taken on the condition of each room, and you should give your tenant the right to note their observations as well.
Think about the process you go through when you rent a car. Before you take off and drive out of the rental lot, you note every ding, dent, and damage to the car. Why do you do this? Because when you return the car, you know another inspection will be done and you might be liable for any new dings, dents, or damage.
Both you and your tenant should think about this when you’re completing the move-in form. The difference is that the tenant is expected and allowed to inflict normal wear and tear on the property. The longer they live in the home, the more wear and tear is expected.
Move-Out Inspection Documentation
The move-out form is just as important. It documents the final condition of the rental once the tenant vacates.
Attention to detail is important because when it comes to California security deposit law, you only have 21 days to provide a final disposition of the security deposit to the tenant. If you miss any damage that was caused by the tenant and you don’t discover it until more than 21 days later, there’s nothing you can do about it. You cannot go back to the tenant and ask for them to pay for it, and you cannot hold the security deposit longer than those 21 days.
After a tenant vacates, test every appliance, check every window screen, look in every cabinet, and conduct a thorough inspection of the property. Any damage that was not there at the move-in should be documented with a photo and written description.
Your tenant has a legal right to be present at the move-out inspection and take care of any of those repairs that are needed before they move out. Usually, the tenants will not have the skill, time, or resources to take care of those repairs.
Once the move-out report is completed and the damage done by the tenant that’s beyond normal wear and tear is documented, you’ll have to estimate the repair costs. You can then deduct the cost from the security deposit. You can also deduct any cleaning that’s required to bring the unit back to the condition it was in when the tenant took original possession.
The balance of the security deposit must be mailed to the last known address within 21 days. If you don’t have all the work complete, you must send an estimated security deposit disposition to the tenant, and follow up with a final bill.
Either way, you must send a final accounting within 21 days, otherwise you put yourself in some legal jeopardy. You may have the courts require you to return the entire security deposit to your tenant, no matter how much damage was inflicted. There’s also a penalty to the owner that’s equal to three times the rent.
If the tenant wants to dispute the deductions, they can file a small claims court case, and as we mentioned earlier, whoever provides the most thorough, detailed, and accurate documentation usually wins.
We can help you avoid court disputes and provide a better move-in and move-out process that provides total documentation, photographs, and videos. Please contact us at Progressive Property Management for help with your California investment property.