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How To Effectively Complete A Move Out Inspection Part 1

Defining Security Deposit

Security deposits are probably the most litigous aspect of a tenancy. The deposit is regulated by Colorado State law and how the deposit is to be handled post move out is dictated by law. You must be certain you know every aspect of the laws pertaining to security deposits and dispositions in order to limit your legal liability.

In the state of Colorado a tenant is able to sue for treble damages when their deposit is “wrongfully with held”. This could mean a deposit was not returned in the allotted time (30 days by law unless agreed upon in writing by tenant and landlord at which time it will be extended to no more than 60 days.), with holding for damages or repairs that were not beyond normal wear and tear, or a number of other situations.

The security deposit belongs to the tenant but is held by a Colorado Springs property management company in order to secure the condition of the home at move out. This means you better not use the deposit for anything during the term of lease. It cannot be applied to last months rent, late fees, or anything else while the lease is in effect. These fees can be with held from the deposit post move out if the tenant has not paid the account in full but you must wait for the lease to terminate and handle it on the deposit disposition. I may sound like a broken record but I can’t stress enough how important responsible and legal handling of the deposit is.

Now that we have defined the deposit and the disposition rules we will proceed to the move out inspection itself. Per Colorado Law your lease must state that wear and tear damage is acceptable and will not be with held from the deposit. This means nail holes, trim scuffs, carpet wear, blind wear, etc. At every single move out (and likely more frequently) you need to be prepared to touch up paint, replace door stops, and other repairs as needed. This is why long term tenancy and keeping your tenant happy is so important. The longer they stay the less often you are doing touch up work. Some landlords are under the impression the tenant is responsible for all damage and do not take normal wear and tear into consideration. This is a complex subject because wear and tear does not apply equally to every situation. If you have a property with one individual living in it compared to a property with 4 individuals living in it, the wear and tear will be more, typically, with more occupants. This does not change the fact it’s wear and tear and should be handled as such.

There are things that can be with held from a deposit. Major damage, abuse, or neglect. For example the tenants take your brand new carpet and change their motor cycle oil with no oil pan. The tenant would be responsible for the carpet but only in that area. If it can be patched it should be patched and not replaced. Remember, you are trying to avoid legal disputes so “sticking it to the tenant” is not the methodology you will want to use. You must be fair and you must document thoroughly.

Your move in inspection is your first tool that needs to be taken seriously. Make sure you have pictures and written documentation, or a video with voice over. If you ever do have a dispute you are going to need a rock solid inspection. Your move out inspection must be just as thorough in documenting condition. These are the first things magistrates will look at if you go to court. The best thing to do is avoid court all together. Many times it will cost you thousands of dollars in legal fees and many days in court and you may not even get legal fees awarded.

Posted by: muldonassociates on June 13, 2013
Posted in: Uncategorized