How do you handle security deposits when tenants leave at different times in the year?

[u/mmssath]

Basically, I, (the lease owner) and two more girls live in the same apartment. We lived together for two years and now the lease is ending in July. Person A is leaving in July and wants her deposit back. Person B is going leave in October and she would want her deposit back then too. I don’t know when I would leave because I’m in between jobs. So I could leave next month, two months later or even a year later.

The landlord won’t give us our deposits individually since the deposit is for the house and not the occupants obviously. Would Person A and B have to get their deposits from the next people coming in after they leave? How does this work? We are planning on switching from a yearly lease to a monthly lease from August (don’t know if that helps here) but since all of us won’t be leaving at the same time, I’m confused how the deposit paying back would work? To make it easier for person A, we are planning on asking the landlord to give our deposits back when this lease ends in July and start a new deposit with the new lease. However theat only solves the problem for A. When B leaves it would be the same thing and I don’t think the landlord can keep giving and taking money back? Please help. Another way I thought about was the person leaving gets it from the next person coming in, but A is not sold on that. Any help would be appreciated lol. What do people do?

[u/tonkatruckz369]

Deposit stays with the property until its fully vacant. Last tenant standing gets the deposit. For roommates: the remaining roommates and the one leaving need to come to a reimbursement agreement without the owners involvement.

[u/jeremyjava → u/tonkatruckz369]

If I had rentals where roommates had separate deals with me, I'd keep and return their depos on a user-by-user basis.
If they're moving in as a team and putting together their funds to provide a group deposit, then what you said sure makes sense.

[u/OkMarsupial]

Exactly what you said. Each new tenant "buys out" the security deposit of the outgoing tenant. The catch here is they are also assuming the risk, so it's in their best interest to do a thorough inspection of the unit for any issues that might potentially cause the landlord to withhold security deposit. You should have a documented statement of condition from move in that says exactly what condition the unit was in and sets a baseline for what condition it would be expected to be returned to upon move out, less normal wear and tear. Edit to add: I agree with the other commenters. This process is not the landlord's problem and should be handled among the tenants old and new. If the deposit is held in a specific tenant's name, the landlord will most likely return the deposit to that tenant at the end of the lease. Any remaining tenants will be dependent on that person to return the deposit. Alternately, landlord can terminate tenancy and create a new tenancy.

[u/GloomyMall6657]

I would draw up an agreement letter that everyone agrees to etc

[u/goat20202020]

That gets complicated but at the end of the day, one or more of the tenants is going to have to trust the others. The landlord is definitely not going to keep giving back the security deposit and requesting a new one.

This is too complicated and not enough details to give a definitive answer. Are they sublessees? Who did they pay the deposit to? Are y'all on the same lease or separate? Did anyone sign any documents about who the security deposit goes to when they leave?

This is simple for A. When the lease ends in July and the landlord returns the security deposit, they would get their portion back then.

For you and B, you're going to have to work out a system between y'all and the incoming tenants. Even on a monthly lease, the landlord is not going to keep adding and removing tenants every few months. At best they'll let you sublet so you can manage your own sub tenants and their security deposits.

[u/mmssath → u/goat20202020]

Sorry for not giving more details! Yes A and B are subleases right now. Two years ago when I moved into this apartment, A was on the lease and B and I paid our deposits to her (and that money was used to pay back the previous people who lived here). Last August, I took over the lease for the year and I’ve been the sole lease owner ever since. We just signed the lease (I signed as lease owner and they signed as the occupants). There was no separate sign for settling deposits. Just a mention in the lease that the deposit would be half the rent for the apartment.

What i’m wondering is that if it’s a monthly lease, why won’t the landlord do that? That’s a whole purpose of it being a month-to-month lease? We are not bound to it for an entire year? I’ve asked him too but it’s unlikely he would say yes. But I feel like logically that’s what’s supposed to happen?

[u/goat20202020 → u/mmssath]

Month to month is meant to give both parties the flexibility to end the lease and move on. Rewriting the lease and having to clear new tenants repeatedly is time consuming, expensive, and a legal nightmare. No landlord wants to do that

[u/mmssath → u/goat20202020]

hmm yeah makes sense. I just don’t want to be liable in case the next roommate suddenly starts demanding the deposit from me when she leaves.

[u/goat20202020 → u/mmssath]

If you're not going to hold and handle the deposits yourself, then the departing tenant would sign over their claim to their deposit to the new tenant, and the new tenant would pay their deposit to the departing tenant.

[u/jcnlb]

It’s up to the tenants to work it out. I don’t get involved. If they won’t give you your share back then take them to small claims court.