Missouri rental property owners have some pretty specific requirements to follow when it comes to security deposit law. Many of those requirements are easy to follow. If there’s going to be a mistake or a dispute, it will likely come at the end of the lease term, when the landlord determines how much of the security deposit to return to the tenant.
Today, we’re talking about security deposit requirements in general as well as how to determine the difference between tenant damage and normal wear and tear at the end of a lease term.
Limits on Security Deposit Amounts
Missouri law limits the amount you can collect as a security deposit from your tenant. You cannot ask for any more than the equivalent of two months’ rent. This means that if the rental amount for your Northland rental property is $1,000, your security deposit cannot exceed $2,000.
Just because you can ask for the equivalent of two months’ rent as a security deposit doesn’t mean you should. If you’re renting a home to a well-qualified tenant with a solid rental history, asking for that much cash upfront could deter them from choosing your home.
Establish a reasonable security deposit amount that protects your property from excessive damage and keeps your property competitive and attractive to well-qualified residents. Typically, this will be the equivalent of one month’s rent.
Security Deposit Returns
When it’s time to return the security deposit, you’ll need to decide whether the tenant is getting the full amount back or whether you’re making deductions from it.
There are some specific reasons that allow landlords and Kansas City property managers to withhold money from the tenant’s security deposit. Don’t keep any of those funds unless you have a documented reason that meets one of these requirements:
- The security deposit is needed to pay for any unpaid rent.
- The home is not as clean as it was when the tenant moved in, and cleaning fees will be deducted.
- Tenant damage is documented and goes beyond wear and tear.
- The tenant violated the lease agreement and moved out before the end of the lease term.
Landlords and rental property owners are responsible for the normal wear and tear items. These costs are part of owning rental property and should be included in your budget, along with vacancy costs and preventative maintenance.
Here’s an example. Those tiny nail holes in a wall are considered general wear and tear, and can’t be deducted from a deposit. However, stains on the carpet from a tenant’s child spilling juice are beyond wear and tear and can be deducted.
Damage has to be documented. Make sure you have pictures and videos and notes. Your move-in condition report should reflect that the damage was not in the property before the tenancy.
Returning a Security Deposit: Timelines
You’re required to return the tenant’s deposit within 30 days of move-out in Missouri. If you’re going to withhold some or all of the deposit, instead of sending the full amount you’ll return whatever is left after you’ve made your lawful deductions. Include an itemized statement so the tenants understand what was deducted and why.
Penalties for Security Deposit Mistakes
In Kansas City, Liberty, Parkville, Gladstone, and throughout Missouri, the tenant can file a claim, take you to court, and recover damages equal to twice the amount of the security or the amount that was withheld if you are found to violate the timelines or the acceptable legal standards for withholding money.
This is why it’s so essential to get it right. If you need some help with Kansas City property management or the management of security deposits, please contact us at Donley Carver Investment Properties.