Question of the Month (August 2006)
Metro Apartment Manager, August 2006
Q: We nearly had to evict some tenants. But before we filed, we talked them out. They left a car—I can’t tell if it runs or not—in the parking lot, also a couch on the front porch but said we could give it to some neighbors. They said they understood they’d lose their deposit since they didn’t clean. So that means all I have to deal with is the car. How do I do that?
A: Property management is a complicated business, controlled by real estate agency regulations, state law, sometimes municipal ordinances, contracts, with a few federal laws (lead paint, fair housing) thrown in. It’s easy to get confused.
If rental turnovers are part of your every-day job, you know instinctively what to do. But if you don’t do it every day, or even if you do, it’s useful to have something like a checklist to be sure you get everything done you need to. I love checklists. They help keep me on track. So I’ve developed several that guide me in my business. One checklist I use is triggered when a tenant notifies me (or sometimes when I notify the tenant) that he is moving out. (If you’d like to see the checklist I use, it’s called “Move Out/In checklist” and is found on the Resources page.)
When someone is moving out, the list reminds me I have tasks regarding the move-out and also about getting ready to move someone in. So — depending on the property — I may need to conduct a rent survey, update and print fliers, or design a newspaper ad. It’s important to do all that stuff now, because in a perfect world — and if I’m doing my job well — when this tenant moves out, I’ll have someone ready to move in a day or two later.
The list also reminds me of tasks relating to the departing tenant. One is documenting the condition of the property. If I will be withholding from the deposit for damage or cleaning, I try to take photographs so I can show what I’m charging for if I end up in court. I also start toting up the charges. If there is cleaning or repairs, there will be costs. Keep track of those.
Another task is dealing with the stuff left behind. Oregon law regarding abandoned property is both specific and prolix. I can’t begin to cover it all here (it’s the length of a novella; a booklet helping you understand it can be ordered through this website), but several aspects need pointing out in your case.
First is that you are obligated to store abandoned property while complying with the other requirements. The only exceptions to the storage requirement are for rotting food and live animals. There’s not even an exception for garbage and trash. Since the penalty is being liable for the value of the property (impossible to prove, once it’s been disposed of), the professional property manager will comply with the statutory requirements. It may be difficult to understand all the rules, but it’s not really onerous to comply with them.
The second point about abandoned property I want to emphasize is that there is a process for avoiding the requirements of the statute. But that comes only when your tenant agrees in writing and within seven days of the end of the tenancy that you can dispose of the stuff. So in your case, your tenant telling you that you can give away the couch doesn’t relieve you of the statutory notice, because it wasn’t in writing.
This isn’t as onerous as it sounds. In cases like this, what I’ve done is told the tenant who wants the furniture that I’m willing to “store” the couch in their apartment until the notice period runs out; then I send out the notice. I’ve never had an ex-tenant respond in that case, so eight days later, the “storage” ends and that tenant now owns a new piece of furniture since I’m free to give it away.
So send the notice. If you comply with the rules, your ex-tenant has no claim against you.
Back to my checklist. It reminds me to list repairs and maintenance. That helps me keep track of what needs doing so I can do it, or — more often — order it done. When I compile a security deposit accounting, that list of repairs and maintenance will help me determine the costs I will be assessing against the deposit.
Your tenant may understand you won’t be returning the deposit, but that doesn’t mean you don’t still have to comply with the legal requirements. Since the penalty is deposit times two and it is so simple to comply with this requirement, you have no excuse not to. Completing the deposit accounting also gives you the documentation you need to do your own accounting.
Remember that a security deposit can only be withheld for physical damage to the property and for lease violations. Physical damage is often easy to identify, though not so simple to quantify. How much do you charge for a carpet stain? for a burn on the countertop? That is a subject for another day. Here I want to emphasize that you must look to your lease documents to see what else your ex-tenant should pay for. Does your lease call for the property to be returned clean? If so and it wasn’t clean, you should take that out of the deposit. Does your lease call for late fees? If the tenant moved on the tenth of the month and didn’t pay for those ten days, you are entitled to the rent and the late fee. Do you have a smoke alarm tampering fee? If the battery wasn’t in the smoke alarm when you did your inspection, you’re entitled to that fee. Did you terminate the tenancy for cause? If your lease has a termination-for-cause fee, you are entitled to that.
Landlords often consider this deposit accounting their final accounting for everything they are due from an ex-tenant. That is not necessarily so. In fact, my deposit accounting letter says at the end, “By law, we are required within thirty-one days to account to you for your security deposit and prepaid rent (if any). Such an accounting is not necessarily a complete listing of all sums due.” So if you discover further damage after sending the deposit accounting, you can still send a bill. Of course, if you had in the meanwhile refunded some of the deposit, you might feel a bit foolish.
Finally, there’s the vehicle to dispose of. To do that, you have to comply with the requirements of another chapter of Oregon law. But that’s a section of law you don’t have to understand or even read; that’s why you have your property posted by a tow company. They know the rules. They may ask you to post the vehicle; they may post it themselves; they may not need to post it at all. They may charge you a fee, but if so it’s worth it.
My usual reminder: each circumstance is unique, so your case will be different. Before you act, be certain about what you do. Don’t rely solely on this general advice; read the law and consult others as appropriate.
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