Scenario: Tenants are behind on rent, moved out, and left a considerable amount of damage. The Tenants also left a note with their new address for the owner/landlord to return the security deposit. Can the landlord automatically keep the security deposit to cover the cost of repairs and clean up?
Answer: No, a landlord cannot automatically keep the security deposit. However, the landlord may be entitled to some or all of it, since it is a fund to offset damages that an owner/landlord may incur because of a tenant’s default under a lease. The TAR Residential Lease (TAR 2001) lists the deductions the owner/landlord can make from the security deposit because of a tenant's breach of contract of the lease. Here, it is likely the delinquent rent and other damages described will exceed the amount of the security deposit and the landlord will be allowed to retain all of it.
Since the tenants left a written statement of their forwarding address, the landlord is required to give the tenants a written description and itemized list of the deductions from the security deposit within 30 days after the tenants surrendered possession of the property. A landlord who in bad faith does not provide a written description and itemized list of damages and charges forfeits the right to withhold any portion of the security deposit or to bring suit against the tenant for damages to the premises.
Note: The landlord may not retain any portion of a security deposit to cover normal wear and tear. Normal wear and tear means deterioration that results from the intended use of a dwelling, including, breakage or malfunction due to age or deteriorated condition, but the term does not include deterioration that results from negligence, carelessness, accident, or abuse of the premises, equipment, or chattels by the tenant, by a member of the tenant's household, or by a guest or invitee of the tenant.
Additional Note: The tenant may not withhold payment of any portion of the last month's rent on grounds that the security deposit is security for unpaid rent. A tenant who violates this section is presumed to have acted in bad faith. A tenant who in bad faith violates this section is liable to the landlord for an amount equal to three times the rent wrongfully withheld and the landlord's reasonable attorney's fees in a suit to recover the rent. If the tenant and landlord agree that the security deposit can be in place of the last month’s rent or any part thereof, they should agree in a written statement.