Security deposits a gray area in leasing

Reading lease contracts can prevent discrepancies with landlords.

By Will Guldin

Published June 2, 2009

When MU senior Erin Caldwell moved into an apartment in Columbia with some friends in late 2007, the last thing she expected was a nine month-long struggle to get her security deposit back.

"Our landlord was actually the family friend of a girl that I lived with," Caldwell said. "I thought, 'Yeah, this is going to be great because he's a friend of her family, so why would he screw us over?'"

Caldwell only wanted to live in the apartment for a year, but her roommates leased it for two, so she signed a separate contract. As she was moving out for the summer, Caldwell said she did everything by the book and was promised her security deposit back by her landlord.

Caldwell said she didn't expect her money to be returned until her lease expired in August, but the check never came. Her former landlord stopped returning her calls in October. At that point, Caldwell contacted a lawyer and took legal action.

"I was trying to give him time because he is my old roommate's friend of the family, and I thought maybe he just forgot," Caldwell said. "But now he ignores me and he's gotten a letter from my lawyer and a letter from the court."

Student Legal Services coordinator Steve Concannon said landlords often try to keep security deposits, which are usually equal to one month's rent.

Concannon said many of the students he helps are seeking advice related to disputes over security deposits, and some landlords use money from the deposits to finance repairs tenants are not legally obligated to pay. He said this violates Missouri law, which states a tenant's security deposit can only be used to pay for damage that is beyond ordinary wear and tear.

Concannon said some leasers will try to use security deposits to pay for tasks such as shampooing carpets or painting walls, which attempt to repair ordinary wear and tear and cannot legally be financed by security deposits.

One loophole that allows landlords to avoid violating this law is writing additional charges into the contract tenants sign before their lease begins, instead of taking the money out of the security deposit after the fact.

Copper Beech Townhomes Property Manager Justin Helton said Copper Beech includes carpet-cleaning fees in the lease, not as something deducted from the security deposit.

Helton said he was unaware of any law concerning security deposits in Missouri, but he saw no problem charging students for cleaning the carpets if it was something agreed to in the lease.

Concannon said another method landlords use to avoid violating the law includes promotional offers used in apartment ads. He said landlords have begun advertising apartments that do not require a security deposit if a tenant moves in by a certain date.

"Say you move in on August 29," Concannon said. "They're making you pay all of August, so you've basically paid a security deposit that you're not going to get back."

Concannon described this as a more transparent business practice than what some landlords are using now.

"They're actually being more honest because they're going to screw you out of the security deposit anyway," Concannon said. "They're just telling you up front that you're paying for a month you're not living there."

Concannon said the best way to avoid these problems is to carefully read the lease before signing.

"One of the common things I see is that students don't read their leases before signing them," Concannon said. "They just pretty much want to gloss over the fine print and get to the signature page."

Craig Stevenson, Associated Students of the University of Missouri chairman, who has been following potential legislative changes to landlord-tenant law in Missouri, said although tenants should expect their security deposits back, landlords aren't out to get renters.

"They charge the fees they do because they are trying to recover some of the costs from those tenants who will leave before a lease is up and leave a place in disrepair," Stevenson said.

He said landlords are ultimately running a business, and if they have the opportunity to make a little extra money, they'll take it.

One such opportunity came when MU graduate student Alex Foss moved out of his apartment at the end of the summer in 2007. He said he and his roommates were surprised when their landlady wanted to keep the entire $800 security deposit they had paid.

"We had satisfied our end of the bargain, in my view," Foss said, admitting he expected a little deduction, but nothing more than $400.

Foss said he took all the appropriate legal steps to get his money back and was able to settle with his landlady outside of court for $900. If he had gone to small claims court, Missouri law states Foss would have been entitled to twice the amount that was wrongfully withheld from him, or $1,600.

Foss said landlords will try to keep security deposits for themselves because most tenants are uninformed about their own rights.

"They do it because it's easy," Foss said. "I think that people are not knowledgeable enough."

Caldwell, who was able to receive her money out of court by contacting her landlord's wife, said her experience has taught her a lot.

"I learned to put more research into things before I do it," she said. "I learned that you have to fight hard for the things you want and you shouldn't let the little things go."

Concannon said the key to getting all of a security deposit returned is to take notice of the condition of the apartment when you move in.

Foss also said documenting the damage in an apartment before moving in and although moving out is a key step for any tenant who wants to receive their security deposit.

"Take pictures," Foss said. "It's no longer word of mouth. 'I've got pictures to show you.' And who's he going to believe then, a landlord who may steal money or you, who's crossed your Ts and dotted your Is?"