Helpline Highlight: Seven steps that protect your security deposit deductions at move-out

Question: My tenant has let me know (in writing) that they will move out when their one-year fixed-term lease will expire. This is my first tenant and I know the security deposit law is complicated - can you provide an outline of what I should do?

Answer: I have provided a list below of the key steps to take as a tenancy is ending with respect to the security deposit. The same steps apply if either party has provided notice of termination of a month-to-month tenancy. Note that you are not required to provide notice of the tenant's right to a pre-move-out walkthrough when the tenancy terminates as the result of a three-day notice. For detailed information, please see the forms and papers linked below.

1. Provide the notice of the tenant's right to a pre-move-out walkthrough a reasonable time prior to the end of the fixed-term lease (or after either party has provided notice of termination of a month-to-month tenancy).
   See form and instructions here: Notice of Resident Option to Request an Initial Inspection
   For more information about the walkthrough requirement and links to additional forms, please see Walk-Through Process
   
2. Conduct the pre-move-out walkthrough within the final two weeks of the tenancy, take lots of photos, and leave a copy of the report in the unit. Your ability to take deductions is limited by what is in this report. You can deduct from the deposit for things listed in the report that were not fixed/cleaned. You can only deduct for things NOT LISTED if the damage/lack of cleaning (1) was not visible during the walkthrough due to the presence of the tenant's personal property or (2) it is new damage/dirt that was not present at the time of the walkthrough. While you aren't required to take photos during the walkthrough - you'll need the photos to support deductions for hidden and new damage, if challenged.

   The move-in/move-out form and instructions can be used to document the condition of the unit at the pre-move-out walkthrough. Move-In Move-Out Itemized Statement Once the tenant has moved out, conduct the final inspection. Take a lot of photographs, because the security deposit law requires photos to be provided with the itemized disposition.

   See this recent Helpline Highlight about final inspections: Helpline Highlight: Walkthrough and final inspection timing
   

3. Make repairs, clean the unit as needed - and take "after" photos of any work that is completed that you plan to charge against the deposit.
   
4. Make sure you have receipts to support your deductions or estimates, if the work cannot be completed within the 21-day period.
   
5. Within 21 days afterthe unit has been returned to you, provide the itemized disposition of the deposit and any refund to the tenant. This must include photographs and receipts/estimates.

   See form and instructions here: Itemized Disposition of Security Deposit

   For detailed information about the security deposit law, please see Security Deposits: Collection and Return
   

6. If deductions were taken based on estimates, you must provide the final receipts and "after" photos within 15 days of the work being completed.

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