Jenni Utz (UTTS Property Management) explains what Maryland landlords may deduct from a tenant's security deposit, focusing on distinguishing tenant-caused damage from normal wear and tear using the concept of an item's useful life (e.g., carpet, paint, appliances). She gives examples (crayon on walls, pet damage, holes) and notes that items past useful life should not be charged to tenants. She outlines Maryland-specific procedure: perform a move-out walkthrough comparing to move-in condition, assess repairs relative to time on lease, ensure repairs are actually paid and supported by invoices before deducting, prepare a statement of deposit listing deductions and attach paid invoices, and include security-deposit interest (using Maryland's security deposit calculator).
What can I charge to my tenant? Security deposit. I'm Jenny Utts with UTTS Property Management, Maryland's number one property management company. Let's get into it. Well, there's several factors that go into it. The first we're going to talk about what is wear and tear versus tenant damage. We've got a chart of what life expectancies should be on any given feature of the property. From carpet to paint, appliances, you name it, there's a life expectancy. So if that tenant has only been in there for a year here, the carpet is ruined, had their kids crayon all over the walls, that would be considered tenant damage. If the property has carpet that is 15 years old, the tenant has been in there the whole time it is worn, has got stains in it, it is past its useful life and therefore would have needed to been replaced anyway. Charging the tenant for that past its useful life. So we would not consider that tenant damage in the same regard. If they put holes in the wall and your lease stays states that there should be no holes, that is considered tenant damage. To repair, that would be a charge that would go against them. If they had a pet and the pet caused damage to the property, that would be considered tenant damage as well. But things to keep in mind, the difference between tenant damage versus wear and tear especially we've got some investors who used to live in the property. So their version of how the property should have been maintained when they were living there versus what a tenant maintains is a lot different. So there is a big disparity in what it looks like for an owner to live in a property and a tenant, they're going to take care of it, but it might not be to the same level that you as the owner would have taken care of it. Also keep in mind if you were an owner and had two people living there and it's a house that is five bedrooms. And so now we've got a family of six that lives there. Their wear and tear of a family of six is going to be a lot harder on the house than a family of two. Just some things to keep in mind and then let's talk about how we are charging this to the security deposit. So in Maryland there is a timeframe that we have to give back the security deposit. And within that timeframe we are expected to not only do the walkthrough of the property and see and compare that to what it looked like when the tenant moved in, analyze how long they've been there, what's wear and tear, what already needed to be fixed and then assess the work that needs to be done. So have those repairs actually being done. What you're going to need to do is have paid copies of the invoices that either the property management has paid or you as the owner, have paid on behalf of those properties. So all the expenses that we want to charge the tenant have to actually be paid and invoiced prior to billing it back to the tenant. So once that happens, you want to do a statement of deposit and you're going to list all of the things that are tenant damage and that are either being deducted or added to their security deposit. So tenant damage is going to be deducted. We want to make sure that there is the copies of the paid invoices attached to that statement of deposit and then also keep in mind what needs to be added. If that tenant's been there for any length of time, they will be getting interest on their security deposit. And Maryland's got a great calculator that you could just Google search Maryland security deposit calculator and it will help tell you what the rate of security deposit interest should be and then you calculate that into it as well. So there's going to be possibly some. Some deductions, but we need to make sure that we're also adding in their fair amount of interest on their security deposit as well. Some things to keep in mind, differences between tenant damage and wear and tear, and differences between when an owner lived at a property, their wear and tear version versus maybe a family of five or six in that same property, their level of wear and tear. And then also keep in mind the length of that carpet has been there, or the life expectancy of the paint or appliances and things like that. When you're making those calculations.
