Steps to Follow When Taking a Security Deposit
When handling Security Deposits there are a few steps that need to occur to avoid getting into trouble and if you miss a step the penalties can be steep. If you miss one of the criteria for your Security Deposits the damages amount to the landlord may be three-fold. Security Deposits are always a concern for landlords. Some landlords are comfortable taking the deposit while other avoid them like the plague. The Security Deposit is an amount of money set aside to indemnify the landlord the costs for repairs or damages should the resident not return the apartment in the condition they received it.
It always comes down to the question, “Should I take a Security Deposit or not?” This is ultimately a decision based upon the management style of the landlord, or the property management agency. There are very strict rules and regulations under MGL 186 ss 15B about how to handle this.
There are two times you can encounter the Security Deposit issue. The first time, is when you rent an empty apartment to a new resident. For a new residency, there is a specific checklist of what to do, and when to do it by, to ensure that you are in full compliance with the rules the regulate Security Deposits.
The second time you will encounter a Security Deposit is upon the acquisition, sale or transfer of rental property that already has resident living there. You must be careful to document everything with signatures as to who paid what, when, who held the deposit, where and how. Missing these details will put the new landlord and the property manager on the hook to cough up the payment plus interest if the residents’ paper work doesn’t match yours. I cannot stress enough how important it is to know all of the details before the sale or transfer. After the sale or transfer, it is “Caveat Emptor”.
In our upcoming posts we will walk you through the specific checklists for each of these situations. In the meantime, please take advantage of our Free Report for Landlords on the “Top 10 Tip To Find The Best Property Manager”. A good property manager can help to manage your property and keep your apartments rented. A great property manager can propel your rental business and help you to grow your rental portfolio and enhance your business operations. Find out how.
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Belaire Property Management
Regional Property Manager
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