We are continuing our Landlording A-Z series, where we previously discussed the ins and outs of getting and preparing property for rent and finding tenants. We’ve also been talking about on-going processes and best practices such as rent collection and maintenance; and earlier we discussed moving a tenant in, now we are discussing what happens when a tenant is preparing to move out.
In this episode we talk about:
- Lease expiration
- Showing the unit
- Planning the move-out logistics
- Move-out inspection
- Wear and tear vs damages
- Refunding the deposit
- Tenant’s abandoned property
For additional information, visit our YouTube channel or see the complete video.
Lease expiration
Leading up to lease expiration you must determine whether you will renew the lease, or whether the tenant will vacate the property. There are local laws that will determine what your options are here.
- If the tenant is moving out early or at the end of a lease term, ensure they provide proper move-out notice as stipulated in the lease agreement. Often that is 30 days in advance but can be specific to your locality.
- Ideally you will have been in communication with them about this well in advance. Ie if in Seattle, you will have offered them a renewal 60-90 days in advance so you would likely know if they were not renewing
- In case of eviction, follow the legal requirements for providing notice and seeking a court order for the tenant to vacate the property. See previous episode for more on evictions.
Showing the unit
Depending on when you receive notice, relative to the move-out date, come up with a plan to show the unit while the tenants are still living there, if possible.
Often renters are shopping for their next home around the 10th of the month, so if you are able to show it then you may be able to fill the space just as the outgoing tenant vacates it.
Planning the move-out
Begin the move-out process by sending a detailed letter to the tenant outlining the steps and expectations for moving out, including cleaning and repairs, and procedures regarding the security deposit.
Once you know the tenant is going to move out and not renew, get a timeline from them so you know when the unit will be available for any showing, repairs, or cleaning you may want to arrange.
Discuss with the tenant whether they will clean or would like to have a professional cleaner come in. This could be their cleaner or yours. They can either pay directly or you can deduct the cost from their security deposit.
Address what they should do with keys, garage door openers, or fobs when they leave.
Remind them to close-out and pay all utility bills in full, as of the last day of their tenancy.
Inspection
Prepare and complete a move-out checklist with the tenant, which may be required by state law, to document the condition of the unit at the time of move-out. In many places you would have been required to conduct an initial move-in property condition checklist. Review that document and any photos/video you took during that walk through.
See also: Watch our earlier move-in video for more information
Conduct a final walk-through inspection with the tenant to review any potential damage or issues that need to be addressed before the security deposit is returned.
Take photographs during the walk-through to have a before-and-after comparison of the property’s condition.
Wear and tear vs Damages
Understanding the difference between wear and tear and damages is crucial for both landlords and tenants to ensure a fair assessment of the property’s condition:
Normal Wear and Tear
This refers to the natural and gradual deterioration of the property that occurs with time and normal use. Examples include:
- Faded paint or wallpaper due to sunlight exposure.
- Minor scuffs and marks on flooring from daily activities.
- Loose door handles or worn electrical switches from regular operation.
- Small nail holes from picture hangers.
- Slightly dirty grout or faded curtains that have aged over time.
Damages
These are the result of negligence, abuse, or accidents by the tenant. Damages can lead to deductions from the security deposit and include:
- Large holes in walls or doors not from normal use.
- Excessive marks on walls, plastic mounting “anchors” left in walls.
- Broken windows or torn screens caused by improper handling.
- Stains or burns in carpets from spills or dropped cigarettes.
- Heavily damaged or broken appliances due to misuse.
Legal Implications
Landlords cannot charge tenants for normal wear and tear, but they can deduct from the security deposit for damages that go beyond normal use.
Lease Agreements
It’s beneficial to clearly define what constitutes wear and tear versus damages in the lease agreement to avoid misunderstandings.
Documentation
Both parties should document the condition of the property at move-in and move-out to compare and assess any changes.
State Laws
Always refer to local and state laws as they provide specific definitions and guidelines on handling wear and tear versus damages.
Returning Deposits
Understand the state-specific regulations for returning security deposits, including permissible deductions for actual damage versus normal wear and tear
Return the security deposit within the legally required timeframe, which generally ranges from 14 to 30 days after the tenant has moved out.
Make sure to get a forwarding address from the tenant
Provide the tenant with an itemized statement of any deductions made from the security deposit when returning the deposit.
Professional Estimates
Obtain professional estimates for the repair of damages to support any deductions from the security deposit.
Ensure that all communication and documentation with the tenant are clear and well-documented to protect both parties in the event of a legal dispute.
After the tenant has moved out, promptly prepare the unit for the next tenant to minimize vacancy time and loss of rental income.
Frequently Asked Questions
When a tenant leaves belongings behind, here are the steps you should follow:
– Conduct a thorough inspection of the property to document the items left behind and assess the condition of the rental unit.
– Determine the reason for the tenant’s departure, as it can affect how you handle the abandoned property. Different scenarios such as lease termination, eviction, or disappearance have specific guidelines.
– If the tenant has left after providing notice or at the end of the lease, you may have more flexibility in handling the belongings. However, if the tenant was evicted, you must follow specific protocols which may involve local law enforcement.
– Send a legal notice to the former tenant, informing them of the abandoned property and your intention to dispose of it after a certain period if unclaimed.
– Store the belongings for the legally required period, which gives the tenant an opportunity to claim their property.
– If the tenant does not claim their belongings within the specified time frame, you may then dispose of the items. Depending on the value of the items, you may need to sell them at a public auction or dispose of them accordingly. (Would you be required to give some or all proceeds to the tenant?)
– Keep detailed records of all communications with the tenant, notices sent, and actions taken regarding the abandoned property to protect yourself in case of a legal dispute.
Remember to check your local and state laws for specific regulations and procedures to follow in such situations, as they can vary widely. It’s important to handle a tenant’s abandoned belongings legally and ethically to avoid potential legal issues.
Takeaway
Have a plan so you’re ready when tenant informs you they are moving out so you’re not losing time getting re-rented.
Then you are ready to start the rent-up process all over again. Brush up on these tasks in our previous episodes on getting your property ready to rent, setting tenant selection criteria, and advertising, showings, and applications.
Landlording A-Z Series:
Our Landlording A-Z series will walk you through each of the stages, tasks, and issues involved in rental real estate investing. In our next installment, we’ll discuss the move-out process.
