Landlords – How to Deal with Tenants When Deposit Return Disputes Occur

landlord tenant disputes deposit return

By Goldenwest Management, LLC

One of the biggest points of conflict between Landlords and tenants is when a disputes occur over deposit returns.

Though GWM advises to that the appropriate steps are taken to avoid such disputes, including; taking lots of pre and post photos, conducting thorough move-in and move-out walk inspections, and making timely repairs throughout the Tenancy, disagreements do happen.

In this post we will start with the deposit return process and assume that you have already followed the above protocol:

Step 1 – The Deposit Return

The first and most important part is to create a return that covers the following

  1. Deposit amount – List the Tenants’ original deposit, as well as remainder at the time of move out (some landlords deduct money during Tenancy – which is another post all together) in a conspicuous position.
  2. Itemize deductions, if any – You are not required to list the price of every single nut and bolt, but you should break down the cost by job; paint, house cleaning, carpet cleaning, landscape trim. If necessary, you can include a small amount of items in a catch all “general maintenance” but you will want to make sure you can document specifically what falls in that category for disputes (light bulbs, air filters, blind slats).
  3. List the name of the contractor (and when possible the invoice number) for each repair. Show the Tenant that you didn’t just invent these charges.
    1. If you have the receipts, don’t be afraid to include them, especially if you did more work than you charged them. Sometimes invoices haven’t been paid by the time the return needs to go out and that is ok, but if you have finalized invoices include them.
  4. List outstanding rent or violations – Be aware that not all past fees (like late fees from 6 months ago) are allowed to be carried forward. Also, note that you cannot charge for “future rent” not yet received (we see this a lot with a Tenant who breaks a lease).


Make sure you correctly “return” the security deposit funds and disposition

  1. Every state has a timeline, be sure to know it and follow it. If you don’t, it’s almost always an “automatic” loss for you.
  2. Determine, in writing, with the Tenant if they will be picking up the return or if you will be mailing it to them.
    1. Get a forwarding address from the Tenant before they move out.
    2. Keep attempting to get that forwarding address all the way until the day the return has to go out.
  3. Mailing the deposit return – You should absolutely send the return “Certified” so that you have a tracking number. This will save you a whole lot of grief if the Tenant claims “you never sent it; didn’t send it on time, or they never received it” – the tracking number with certified is your best friend, and only costs a few dollars.
    1. If the Tenant never provides a forwarding address, you should still send out a deposit return, ESPECIALLY if they owe you money. Send it to the last known address on file, send it Certified Return Receipt, and that way you will have a record if they do not claim the letter.
    2. If you owe the Tenant money, then I recommend sending the return, without funds, to the last known address. Keep reminding them that you are holding the funds for pick up.

Step 2 – Responding to a Dispute

Disputes come in all forms, and as a Landlord you have to responds appropriately to each dispute.

  1. Phone or email disputes – If the tone is appropriate, you may choose to open a dialogue, but often it’s best to ask for disputes to be made formal and mailed…some people may think that is not necessary, but let’s examine why:
    1. Let’s face it, most people can’t control their temper and emails and phone calls get informal and inappropriate. I can’t count the times a former Tenant will use phrases like “you’re a thief; I am calling the state attorney, the house was a piece of shit when I moved in” and the list of unproductive comments goes on.
    2. Email, especially, opens up to quick and less formal responses. As a Landlord you want the process to be as deliberate as possible. You want to review their points for validity, and be able to make an appropriate response and sometimes a counter offer to their demands.
  2. The certified letter – When you receive this, either directly from the Tenant or their lawyer, then you know they mean business. This is the first step required in filing in small claims court, and usually represents the fact that the Tenant (or counsel) knows what they are doing and are taking a practical approach.
    1. Again, review the letter for valid arguments, point by point looking to ensure that common sense is applied. Often times a letter from an attorney will be verbose and quote a lot of “statutes.” However, simply listing a statute doesn’t tell the whole story as it relates to the deduction.
    2. Attorney’s constantly like to claim that the deductions are “inappropriate” due to the damages not being above normal wear and tear and then site the statue that a landlord cannot charge for normal wear and tear. However, they never get into the details of what specific damages constitute normal wear and tear or why the damages done by their client are not normal wear and tear.
  • Focus on their demand – Is the Tenant offering an alternative solution? Do they give you a reasonable time frame to respond?

Based on their specific arguments, tone and type of resolution requested by the Tenant, these will be the items you factor into your response.


Step 3 – Responding Appropriately

Now it’s time to formulate a response to the Tenant. Any demand for “immediate action” should be met with a letter stating that you need at least 14 business days to review the dispute, the evidence and provided an appropriate response.

  1. Don’t worry about going into detail with your response on each point. Provide a general, but sound, position as to why you disagree with RELEVANT arguments made by the Tenant.
  2. Include copies of receipts if you haven’t done so already.
  3. Request that the tenant send over any relevant evidence to support their claims
    1. Rarely do Tenants EVER include documentation when they submit a dispute. Pictures, evidence of receipts, etc… are almost never included with their demands.
    2. Put the onus on them to prove why you should even entertain their assertions.
  4. If necessary feel free to include copies of the Lease, Move-in Walk thru, Move-out Walk thru, and all invoices or violation notices. However, I would recommend not including pictures. You will get that opportunity when getting ready for court if you go that far. This is the trump card that you want to play close to the vest.
  5. Offer a settlement – unless you know you have an absolutely open and shut case and you have followed the letter of the law, you should always offer a “nuisance settlement” – basically a small amount of money to save all parties time and money. A lot of times just a few hundred dollars will be enough for both parties part ways.

The Tenant may file respond to your letter, in which you can continue to negotiate. The Tenant may not respond and simply go away (they will definitely not continue to spend money on a lawyer in most cases as they learn quickly that is just wasted money). And of course, the Tenant may file against you in small claims court.

As long as you as the Landlord understand that you have followed the deposit return standards, have all your receipts and documentation, you have everything you will need in court. In addition, usually both parties can continue to negotiate until the day in court arrives.

Learn More

This is a very basic guideline to handling deposit disputes. Though not overly complicated, there are many gray areas and a plethora of circumstances that may force you to address a deposit issue differently.

This is one of the most important aspects of owning a rental that an experienced property manager can handle for you. Imagine if you are out of stated and trying to handle this on your own? Is the time and energy really worth it? Not to mention unless you are an attorney, how often do you deal with this type of dispute?

Learn more about how to properly protect yourself and your investment property by contacting Goldenwest Management, Inc. Click on the link to visit our website or by calling (866) 545-5303 or visit each office:

Las Vegas Property Management (Click here)

Phoenix Property Management (Click here)

San Diego Property Management (Click here)

Tenants – How do I dispute the deposit return?


As a property management company that manages properties in Las Vegas, Phoenix and San Diego, we conduct Tenant move-outs all the time.

75% of the time, the Tenants leave the home in good condition and receive most if not all of their security deposit back.

15% of the time, the Tenants simply don’t take the time to clean or fix any minor damages in the home and they have 30-50% of their security deposit deducted in order to return the home to a rental condition.

10% of the time, Tenants do a lot of damage to the home. We are talking well above normal wear and tear.

In almost every occasion, the landlord is required to pay some money out of their own pocket, because a Tenant should never be responsible for basic, normal wear and tear repairs. After long term Tenants occupy your home property, it’s only natural that the property will need some sprucing. Every few years it’s a given that a home will need new floors, new paint, new window treatments, etc…

But often times, Tenants and Landlords vehemently disagree who is responsible for what repairs.

If a Tenant is not happy with how much money they receive from their deposit return, they sure will reach out to demand more.

This post will focus on what we, as a property management company, can suggest to Tenants in order to create the best chance of receiving MORE money after the initial deposit return:

Proper Communication

The number one issue we see from past Tenants is that they immediately call and email, usually making threats and demands that are simply over the top. The truth is that none of that will get you heard or in many instances even garner a response.

Start with some simple basics:

  • Send a certified, return receipt letter – In most leases, it clearly says who to address the letter to (the Landlord) and where to send it: care of the Property Management company at their place of business, or if you didn’t have a PM then to the Landlord’s mailing address on file. In addition, you can send a courtesy copy via email as well just to let them know that you have initiated the initial step in the dispute process.
  • Don’t make threats, it’s not necessary – Stick to the facts as it relates to the deposit return. There is no need to say how horrible you think they are, or that they are crooks and you are going to call the BBB, the attorney general, etc…simply focus on the deductions.
  • List the deductions and the evidence of why you are disputing them – The best letters usually have the deductions bullet pointed,
    • “House Cleaning – $200 – We had a copy of a professional cleaning receipt given to the manager at the time of the walk thru, see attached”
    • ex “Patch hole in living room – $100 – Notated on our move-in walk thru is a drywall hole, see attached”
  • Ask for specifics – Often times Landlords do not send copies of invoices with the deposit return, or the invoice is does not list specific repairs. You have every right to ask for clarification of “general maintenance” or for copies of invoices. Please note, that depending on the locale, Landlords are not required to turnover photographic evidence, until the discovery period during a legal suit…so if you ask for all photos of the walk thru, you may not get them.
  • Ask for a specific solution – Often times, Tenants say don’t mention a specific dollar amount they are looking to receive. Don’t forget to ask for the amount you believe should be returned to you.
  • Give an appropriate time frame for response – Often times, we see Tenants say, you have 48hrs to respond, or maybe 5 days. That is rarely a reasonable amount of time for evidence to be reviewed and a settlement decision to be reached…especially when a management company has to take all the documentation to the Landlord and wait for them to decide on how to proceed. We recommend asking for a response within 10 business days.
  • Provide a return address – An email or fax number will probably not get you any type of response. There is nothing wrong with providing a phone number or email, but you absolutely need to include an address where follow up correspondence can be sent. Especially if you are asking for copies of documents.

As a management company, we know that a Tenant means business (and often times has some valid points) when we receive this type of response to a deposit return. This means that we will fast track this person’s dispute so that we can formulate the appropriate response from the Landlord. FYI – if you want to pay the money to have an attorney write this same letter, go ahead, but I have never seen a Tenant awarded that money in court. And trust me, you can write the same letter, minus paying the $500+ dollars that an attorney will (and BTW they can’t represent you in small claims court anyway). Obviously if it is your situation is extremely complicated or involves a significant dollar amount, it might be a good idea to consult legal counsel. Just remember they don’t always add any value to the situation except including the statutes (which anyone can google) and some colorful lexicon.

Working with a response from the Landlord

  • What if I get a response that I don’t agree with – Sometimes you may receive a response from the Landlord or their agent that you don’t agree with.
    • You can forget about it (see above)
    • You can file in small claims court (see below)
    • Or you can attempt to settle the matter.
  • What if both sides are willing to settle – Often times both sides will use strong language, but will include an offer to settle. This is often a win-win, even though both parties rarely feel that way. Usually both parties have key points and evidence that look strong, so in the interest of saving time, money, emotional stress, and each side will “give a little” so that the matter can be resolved.
    • Usually there may be some back and forth, with the communication possibly switching to either phone or email. When dealing with reasonable people, certified letters are not needed.
    • When settlement is reached, often a document will be signed by all parties releasing any future liability, claims, and online bashing.
    • A check is usually delivered within (3) days and the matter is resolved.
  • What if I hear crickets – If you don’t get any type of response, then you have two options
    • Let it go…maybe you don’t have any pictures, copies of invoices or anything that can “prove” beyond a preponderance of certainty that you had money improperly with-held.
    • File in small claims court – You have already sent a “demand letter” so if you want to continue to pursue the matter, you can simply go down courthouse and file in small claims court.
    • Whatever you do, don’t make the mistake of filing against the Management company or agent. Remember that in almost every lease and every state, the Management company or Agent is not the responsible party. They don’t have owner ship in the property and often can counter file against you, and be awarded a judgement, because you failed to follow appropriate procedures. Even worse, you may be forced to refile…meaning you have to start all over again and pay more court fees.

Notice the process: it doesn’t take an “all-out war” to get to each decision making step (for both parties). Sometimes the Manager, the Landlord, and the Tenant can realize there is common ground by simply partaking in the professional process (versus shutting down and not being reasonable when it is nothing more than a mud-slinging bout).

Filing in Small Claims Court

  • You have already sent a “demand letter” so if you want to continue to pursue the matter, you can simply go down courthouse and file in small claims court. File in the court that has jurisdiction in the area where you rented the property. The cost is roughly $45-$75 depending on the locale and the servicing requirements.
  • Even if you are supremely confident, small’s claims court is not like law and order.
    • If you don’t have the evidence properly organized, if you can’t present a strong case, if the judge doesn’t like your attire or just woke up on the wrong side of the bed…you could be fighting an uphill battle.
    • Unless you have been to small claims court a lot, you are stepping into an arena that you may not have a lot of experience in. The Landlord may have more experience, and the manager (who will be there as the Landlord’s key witness) has definitely been to more to several proceedings.
  • Avoid Common Mistakes – This can slow the process or even get you on the wrong side of a judgement.
    • Name the appropriate party. The Landlord’s name is usually listed on the lease. If you can’t find it, do a title records search.
    • Don’t file against the Management company. In almost every lease and every state, the Management company or Agent is not the responsible party. They don’t have owner ship in the property and don’t have the ability to negotiate claims without the Landlord’s authorization. In addition, the Management company will often counter file against you, and be awarded a judgement, because you failed to follow appropriate procedures. Even worse, you may be forced to refile…meaning you have to start all over again and pay more court fees.
    • Asking for money including plane tickets, mail, time and energy…the judge will not award this to you, and often times gets the judge to not look favorably on your other monetary claims.

Even after you file in small claims court, many locales require mandatory mediation. If there is open communication, many parties continue to work towards a settlement until the time the case is heard.

At Goldenwest Management, Inc. we understand that there are going to be disputes from time to time over security deposit returns. But we hope that all disputes can be resolved in a respectful manner, and if there are mistakes by Landlord or the Management company, this is the best way to get them fixed.

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