If I terminate my lease early, can my landlord keep my security deposit and charge me a fee?

November 9, 2012 17:49 by Consumer Ed

Dear Consumer Ed:

I moved out of my apartment before my lease was up. The property management company made no effort to contact me to let me know I owed a lease cancellation fee.  They claimed to have mailed two letters, but never did call me, nor did the letters arrive, nor was anything certified.  They turned me over to a collections agency.  Can they legally do that?  They haven't explained where they got the dollar figure from, nor did they credit my security deposit when sending me to collections.  Can they just keep my security deposit and not even count it as credit as to what I owe?  That seems like double-dipping to me.

Consumer Ed says: 

When you signed your lease, you entered into a contract with your property management company.  In this situation, the terms of your lease are legally binding. 

Some leases allow tenants to cancel the lease early but impose a set penalty fee for doing so. If the terms of your lease permit your landlord to do this, you will likely be obligated to pay that fee, regardless of whether your unit sat vacant or was re-rented.  The property management company is not required to notify you before charging you the lease cancellation fee, unless your lease says that it must do so.  And yes, the property management company has the right to refer the matter to a debt collection agency after attempting to notify you of the debt.

Under the Fair Debt Collection Practices Act, it is the duty of the collection agency, not your property management company, to validate your debt.  Within five days of the collection agency’s initial communication with you, it must send you written notification including the following information:

•    The amount of the debt;
•    The name of the creditor to whom the debt is owed;
•    A statement that unless you dispute the validity of the debt within 30 days after receipt of the notice, the debt will be assumed to be valid; and
•    A statement that if you notify the debt collector in writing within the thirty-day period that the debt is disputed, the debt collector will obtain verification of the debt and mail it to you.

In most cases, the property management company is required to return your full security deposit within one month after you terminate your lease.  However, there are several conditions that would allow a landlord to keep a security deposit, including financial loss caused by your early termination of the lease.  Again, the particular terms of your lease will determine whether the property management company would be required to count the security deposit as credit toward the early termination fee that you owe.  You should carefully read your lease, and if it turns out that the terms don’t allow your landlord to impose a cancellation fee in addition to a forfeit of your security deposit, you may want to consult an attorney for legal advice.

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Landlord charging for normal wear and tear

September 7, 2012 23:49 by Consumer Ed

Dear Consumer Ed:

I am moving out of my apartment and just got a move-out inspection sheet with the following itemized costs:  Carpet - $75, Cleaning - $75, Blinds - $105, Crayon marks - $50, Damaged tub - $50. The tub is not damaged. Carpet is old (5 years). The apartment is clean. I thought these items were considered normal wear and tear. Do I still have to pay?    

Consumer Ed says: 

Depending upon how large your apartment complex is, you might.  Under Georgia Law, there is a separate standard for landlords who own more than ten rental units or who employ a management agent (regardless of the number of units owned) and landlords who own fewer than ten units.  Landlords who own ten or more units or who employ a management agent are required to conduct a move-in inspection of the premises and then must give the tenant a list of any existing damages to the premises before collecting a security deposit.  If your landlord falls into this category, but did not provide you with a move-in inspection sheet, s/he may not withhold your security deposit when the lease ends.  If your landlord did comply with this procedure, s/he may withhold your security deposit, ask you to pay for any additional damage not covered by the cost of the security deposit, and sue you for any additional amount if you refuse to pay.

Landlords who own fewer than ten units and who manage their own units are not required to follow any inspection procedures.  If your landlord falls into this category, s/he only needs to notify you whether s/he intends to keep your security deposit, and if applicable, whether you owe an additional amount for the damages.  S/he also has the right to sue you for this additional amount if you refuse to pay.  You’ll have five business days starting at the end of your lease to specify, in writing, the items for which you don’t think you should have been charged, or to contest the amount charged for any particular item. 

If these costs are only for normal wear and tear, the landlord cannot keep your security deposit. Normal wear and tear applies to slight damages that are the result of the renter, his/her family, and guests using the apartment for its intended purpose.  If the premises or its fixtures are damaged in any other way, the landlord can charge you for that damage.  Crayon markings, for example, might not fall into this category.  This is true even if the item damaged is old; however, the age of the item or fixture should figure into what you get charged for any damages.  The amount charged per item should reflect the age and/or quality of that item as it was when you moved in.  If there’s any damage to an older carpet (as in your case), you shouldn’t be charged for the cost of the new replacement carpet, but a reasonable amount for the actual damage that can be quantified.  To confirm whether a charge is reasonable, you could check with reliable sources in the flooring repair business, and get estimates from them to compare to the amount charged by your landlord.  Just know that you’ll likely have to pay this cost if you, members of your household, or guests, actually did damage the carpet.

If your landlord refuses to refund your security deposit, you may sue to recover the portion of your security deposit being wrongfully withheld, interest on that portion of the security deposit, attorneys’ fees, and legal fees in the magistrate, state or superior court where your landlord (or where his registered agent, if any), resides.

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Landlord is letting house we rent go into foreclosure

June 7, 2012 17:51 by Consumer Ed

Dear Consumer Ed: 

We have been leasing a home since July 2010.  Our lease is set to expire in August 2012.  We just found out today that the landlord has let the rental home go into foreclosure, with a sale date of July 3.  Whom do we notify, advising them of our lease?

Consumer Ed says: 

First, you should know that, until at least the end of 2014, under the Federal “Protecting Tenants at Foreclosure Act of 2009,” tenants have the right to stay in a foreclosed property through the end of their lease, unless the new owner is planning to make the foreclosed property his or her primary residence. In that case, the owner may terminate your lease, but you must be given 90 days’ notice to vacate the premises.  If you don’t have a written lease, if your lease is month-to-month, or if there are fewer than 90 days left on your lease, you are still entitled to 90 days’ notice.

You will want to notify in writing the bank that is foreclosing on the home of your lease. The simplest way to find the bank’s identity is to ask your landlord for that information.  If your landlord is unresponsive, there are other ways to identify the bank.  In Georgia, sale of foreclosures must be advertised at least once a week for four weeks immediately before the date of sale (in this case, July 3). Rather than searching through newspapers, you can go to this website, http://georgiapublicnotice.com, to search for the advertisement. Note that you may not be able to find who put out the ad by simply searching the address, since the address is not required to be included in the notice.

If the bank hasn’t been publishing the sale as the law requires, then you may be able to find out the name of the bank that foreclosed on your landlord by searching for the deed stating the foreclosure (it will state the date of foreclosure and the name of the bank).  Deeds are public records, and you should be able to search for it at your county’s clerk’s office by using the property’s address.  Many, but not all, counties have their tax assessor’s records online.  If your county doesn’t have its records available online through its own website, this website may help: www.gsccca.org.

Once you do find out which bank owns the home, call the bank and tell them about your lease (if they don’t already know, which they may).  Ask if there is a management company temporarily in charge of the rental home, and if so, the contact information of someone whom you can call directly if there are any problems with the apartment (leaky faucet, etc.). And, don’t forget to ask where to send your July rent check.

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