When a tenant vacates the leased premises prior to the end of their lease, the landlord is often left with two key questions: 1) what am I required to do next, and 2) how can I collect?
Even when your tenant skips, you still need to prepare a security deposit accounting. The Texas Property Code requires a landlord to send an itemized security deposit accounting to a tenant on or before the 30th day after the tenant leaves the apartment. Even if the landlord does not believe the tenant is entitled to a refund, the landlord is still required to mail the tenant an accounting within 30 days (if the tenant provided a forwarding address), and there are strict penalties if this isn’t done. An itemized accounting also provides helpful evidence for future collection efforts.
Here’s how to calculate the numbers:
Generally, tenants who vacate early will at least owe the reletting charge (which can be up to, but not exceed, 85% of the monthly rent) as set forth in paragraph 10.1 of the TAA lease, as well as accelerated rent stated in paragraph 32.3. The tenant may also owe, unpaid rent, late fees, pet fees, damage to the apartment, and legal fees.
Tenants who are judicially evicted prior to the termination of their lease are also liable for these same fees.
Under paragraph 6 of the current TAA lease, a landlord may charge daily late fees, up to, but not exceeding, 15 days for any single month. The daily late fees are in addition to the initial late fee. Next, when determining how much a tenant owes for damages to the premises, the landlord must omit any amount resulting from normal wear and tear pursuant to section 92.104(b) of the Texas Property Code.
Applying the Security Deposit
Once the total amount owed by the tenant is calculated, the security deposit is then applied. Pet deposits and other fees may fall under the legal definition of “security deposit.” A landlord should carefully review the fees it charged the tenant, and seek legal advice when unsure whether a fee falls within the definition of security deposit. Although not required, photographic evidence of any damage to the apartment is definitely recommended.
The landlord must deduct any amount it mitigated. Section 91.006 of the Texas Property Code, and paragraph 32.6 of the TAA lease, require a landlord to mitigate its damages. Mitigation means the landlord must use objectively reasonable efforts and “exercise customary diligence” to re-let the apartment. It is important to note that a landlord is not required to re-let the premises to simply any tenant; rather Texas law requires the landlord to re-let the premises to a suitable tenant under the circumstances. In some cases, a landlord is able to re-let the premises within a few days after the tenant vacated early. If that’s the case, then the landlord must deduct the rent it receives from the amount the tenant owes.
What Happens If No Itemized Security Deposit Accounting Is Sent?
Tenants could file a lawsuit against the landlord if this doesn’t occur. Section 92.109 of the Texas Property Code states that a “landlord who in bad faith does not provide a written description and itemized list of damages and charges: (1) forfeits the right to withhold and portion of the security deposit or to bring suit against the tenant for damages to the premises; and (2) is liable for the tenant’s attorney’s fees to recover the deposit.
This section further provides that a landlord who fails either to return a security deposit, or to provide a written description and itemization of deductions on or before the 30th day, is presumed to have acted in bad faith.
Pursuant to section 92.107 of the Texas Property Code, the 30-day time period does not start until the tenant gives the landlord a written statement of the tenant’s forwarding address. A landlord is presumed to have properly refunded a security deposit, or made an accounting of security deposit deductions, if the refund or accounting is placed in the United States mail and postmarked on or before the 30th day.
Landlords are also able to send the tenant’s delinquent account to a collection agency pursuant to paragraph 32.5 of the TAA lease. Itemized security deposit accountings are helpful evidence for collection agencies, and even more helpful for the landlord’s attorney should the matter end up in court.
Following the above steps after a tenant vacates early should greatly reduce legal liability with respect to security deposits and collection efforts. If you have any questions regarding these matters, we recommend you seek legal advice.