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Security Deposits: What Roost members say | 2021 survey results
What percent of renters know how to get their security deposit back?
The security deposit is a significant asset for most renters, typically worth a whole month of rent or more. The landlord holds the security deposit to secure their apartment. According to a new survey by Roost, renters are largely unaware of many key factors involving their security deposit – from what types of damages would be considered to whether they would be charged for ordinary wear and tear or if they would accrue any interest on their deposit during the lease term.
A lease is a legal document, so local and state laws apply to how security deposits are handled by property management companies and landlords. Yet, residents responding to the survey overwhelmingly answered “Don’t Know” when it came to the law or their rights on things such as the number of days the landlord may keep the deposit after move-out, according to the survey.
Roost security deposit survey results
|Renters who didn’t take move-in pics
|Renters reporting that deposit refund terms were not communicated well
|Landlords who explained deposit refund terms well as reported by renters
|Renters who paid a deposit via an online portal
|Landlords who provide move-in/move-out checklists as reported by renters
|Landlords who provide a cost list of items and conditions as reported by renters
|Property managers who conduct periodic inspections
|Renters who expected a full deposit refund from their current landlord
|Renters who expect over 50 percent of deposit refunded from their current landlord
|Percentage of renters who challenged a security deposit refund amount (estimated by property managers)
|Renters who would prefer direct deposit refund payments
|Renters who prefer a check refund payment
|Leading cause for deposit reductions reported by renters – damaged walls and paint
|The second leading cause for deposit reductions reported by renters – damaged carpet and flooring
Security deposit requirements can be as low as $300 and as high as $3,000. Often they are determined based on the rental applicant’s credit score, among other considerations. Effective resident security deposit management starts on move-in day. Taking images of the condition of the apartment – from the walls to the floors to the appliances – is crucial.
How many tenants take move-in pictures?
“Time-stamped, detailed images of the apartment’s condition at move-in is perhaps the most effective way to cover yourself if you are a renter concerned about getting your security deposit back,” Chanin Ballance, CEO, Roost, says. “Yet, our survey showed that more than half (51.6 percent) of renters did not take photos of their apartment after they moved in. And interestingly enough, those same respondents said that damaged walls or paint is the No. 1 issue that leads to security deposit withholding (55.6 percent), followed by carpet and flooring at 38.7 percent. Pictures don’t lie.”
Understanding security deposit terms
Another troubling result from Roost’s survey was that more than half (50.8 percent) of respondents said their property managers did not provide clear instructions on how to receive a 100 percent refund of their security deposit; and just 30.8 percent provided an explanation, although it is required in most states.
And only about half (56.5 percent) of landlords provided a checklist or app that listed the things that could result in a security deposit refund deduction, and just 29 percent provided a cost list of those items or conditions.
Meanwhile, the survey showed that about one-quarter (23.4 percent) of landlords or property managers perform random inspections of the property during the renter’s term.
How much security deposit do renters think they’ll get back?
Forty-one percent of respondents said they expect to receive 100 percent of their security deposit returned, and an additional 29.8 percent say they expect to get more than half of it back. No doubt, resident education about security deposits is needed, and bringing greater transparency to the situation is warranted.
Roost provides valuable resources on security deposit management here.
Direct deposits much-preferred
Besides a desire for greater transparency in the process from the day they move it to the days after they move out, residents shared preferences about the payment itself.
Given today’s consumer trend toward more app-based payment vehicles and digitally managed cash overall, renters are seeking modernized processes for security deposit payment and refunds.
Half of survey respondents paid the security deposit directly to the property management company, and another 29 percent did so through the property management portal.
Sure enough, nearly half (48.8 percent) said that they prefer their refund to be direct-deposited to their checking account; and an additional 41.9 percent would request it via a check.
Challenging security deposit refunds
A common mistake that renters make about their security deposit refund is thinking it’s wholly based on the condition of the apartment. But, if a resident owes back rent or fees, the property manager often will deduct that amount from the original deposit. The landlord also will charge cleaning fees on top of the assessed damage costs.
Should a resident want to challenge the process, landlords will likely first invite a conversation with the renter to reach an agreement. If that fails, renters could take their case to small claims court, based on the state in which they reside.
One veteran property manager estimates that about 40 percent of residents will challenge the refund but said that it’s very rare those cases end up in court. Once presented facts, usually in the form of images or documentation, or a review of the lease, renters see that their case is not worth the hassle of legal action, and they settle.
When conversations with your landlord don’t work: Going to court
If they want to pursue the case in court, residents typically must first write a dispute letter to their landlord, demanding a larger refund or a remedy. Disputes usually go before a judge (there are no juries) within a month or two. Residents may sue for the security deposit amount that they believe the owner wrongfully withheld, up to the state’s limit.
It is advised that renters send demand letters by certified mail (return receipt requested) or with another service that provides a receipt, establishing the delivery date. Keep a copy of the demand letter and the delivery receipt. These documents are required in court.
For additional information on how to get your security deposit, laws for your area, and how to work with your landlord, read Roost’s Ultimate Guide to Security Deposits for renters.
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