If someone handed you a fragile and expensive vase, you'd promise to take care of it. But even the most sincere promise isn't a guarantee. Accidents and mistakes happen.
That's why security deposits are a central and ubiquitous aspect of rental management.
If this is your first time setting security deposits for your property in Kansas City, read our short guide on everything you need to know.
How Much Is a Security Deposit?
In the state of Missouri, there is a limit on how much you can charge on a security deposit. The maximum you can request is the equivalent of two month's rent.
This is important to take note of when signing new leases for tenants. Failure to comply can result in penalties.
You Have a Time Limit for Returning Deposits
Once a tenant leaves your property, the timer starts to return their deposit. In Missouri, you have up to 30 days to return that money to your tenant when the lease ends and the tenant has left.
The 30 days allow you to inspect your property for damage and make any necessary deductions from the deposit.
You Can't Make Deductions for Everything
There are rules about the deductions you can make from a security deposit. So, you must follow these guidelines before returning a deposit; otherwise, you may face a claim from your ex-tenant.
For example, you can deduct money for rental property damage but not for everyday wear and tear. You can also deduct money for any unpaid rent. However, you must show evidence of why you are withholding part or all of a deposit.
Security Deposits and Interest
In some states, you must pay the tenant part of any interest earned while holding their deposit. However, that's not the case in Missouri.
That makes managing it more straightforward, as you don't need to calculate these earnings. Nevertheless, keeping the deposit separate from your personal bank account is essential to ensure straightforward money management.
Landlord-Tenant Law Details
It's important to remember that your tenants have legal rights regarding their security deposit. They can sue you if they feel you have acted unfairly. If they win that case, they could request more than the original amount.
These laws offer tenants legal protection against unscrupulous landlord practices.
Security Deposits and Communicating With Tenants
Remember that good communication is essential in managing and returning security deposits. It helps avoid confusion, such as returning the money to the wrong place.
Proper written communication on security deposits will also protect you legally. That means proof of receipt, evidence of property damage or missing rent, and deposit rules outlined in your lease agreement.
Security Deposits: Protecting Your Property
Don't feel embarrassed about asking for a security deposit. It's standard practice, and for good reason: it protects your investment. Use this guide to help you establish security deposits for your rental property.
Having the helping hand of professionals can streamline your security deposit process.
SCUDO's team has extensive experience in Kansas City, MO and can handle any real estate challenge, so we offer a comprehensive range of services. Head here to learn how we manage rental properties on your behalf.
