Evictions are on the rise in Tennessee. In fact, there are now more eviction filings than before the Covid-19 pandemic. The number of eviction filings is up 66% from the year prior.
To help households, the government enacted eviction moratoriums during the pandemic. These moratoriums expired, and landlords now have more tools to protect their business interests.
A security deposit is one of the tools that landlords use. Read on to learn how to collect and return security deposits. Explore topics such as Tennessee security deposit laws.
1. How Much Is a Security Deposit?
Before diving into Tennessee law and ways to collect a security deposit, it is important to understand what the typical amount is. There is no maximum amount for a security deposit.
However, the standard security deposit is equivalent to one month of rent. This means that if your rent is $1,600 per month, a landlord can reasonably request an equal amount for the security deposit.
There are certain conditions that may justify a higher security deposit. If it is a furnished property, for example, the landlord may request more. A pet-friendly policy is another example of a higher security deposit.
2. How To Collect a Security Deposit?
A security deposit is not treated the same way as monthly rent payments. By Tennessee law, the landlord cannot mix your security deposit with other funds. Instead, they need a special account with the sole purpose of holding security deposit funds.
The security deposit is collected at the lease agreement signature. Here, the landlord must provide a written notice detailing where the security deposit is held. It will cover all facets of the lease, including eviction procedures and final inspections.
3. How To Return a Security Deposit?
The security deposit is returned at the end of the lease. The landlord issues a written notice to the tenant describing when to vacate the property.
The landlord will also schedule a comprehensive inspection of the property. Here, the landlord looks for cause to keep all or a portion of the security deposit.
4. What Are the Causes for Not Returning a Deposit?
There are a few common reasons why a security deposit is not returned. Property damage is one of the most common causes. They can also withhold a portion of the security deposit for uncollected fees or rent.
When damage is present, the landlord gives a list of required repairs. Both parties need to agree and sign off on the repairs. The tenant can dispute items on the list and attempt to remove them.
If there is no damage, the landlord needs to return the security deposit within 30 days. If the tenant is unreachable, the landlord gets another 30 days by Tennessee law. However, they need to do their due diligence to find a tenant's new address.
Your Guide to Tennessee Security Deposits
You are now ready to collect a security deposit in Tennessee. It is important that you do not treat a security deposit as revenue. There are strict rules for holding these deposits and returning them at the end of a lease.
If you have more questions about security deposits, contact us at PMI Clarksville to speak with a property management expert.
