Performing a move-out inspection with or without the tenant.
When a tenant gives notice, or a landlord serves legal notice to vacate a property, a landlord must perform a few tasks in order to be able to claim costs against the security deposit. Many landlords understand they must return the damage deposit within 15 days after a tenant vacates the property, and that the tenant is required to provide their forwarding address. Those are the easy parts of the move out process. There are other steps many landlords often misunderstand about the move out procedure.
The most important step is performing the move-out inspection. After the tenant has removed all their belongings from the property and cleaned the unit the landlord and tenant must meet at the property to review the condition of the property. The Landlord and tenant should have completed a condition move-in inspection report at the start of the tenancy, (RTB27 form) and this same report should be brought to the move-out by both the landlord and the tenant for review by both parties. The condition inspection report has a section where the tenant inputs their forwarding address, and the parties indicate on the form what the amount of the damage deposit is going to be held back by the landlord. If the parties don’t agree there is a section where the tenant signs to say they disagree with the amount held and then the landlord must then file with the RTB within two weeks to claim the funds from the deposit. Without a tenant’s signature on the move out inspection form, the landlord has no right to keep any part of the damage deposit.
During the inspection process if there is a dispute regarding the condition of the property between both parties it is at this time that an estimated cost of the repair must be indicated on the form. For example if the unit has not been cleaned to your expected standard and you the landlord feels it is going to cost $200 to clean the property then you advise the tenant you will keep that amount from the security deposit. If the tenant agrees you write that amount on the move out form and both parties sign off on the remainder of the deposit being returned to the tenant. If the tenant disagrees with the amount you suggested then both parties must agree on a different amount or there is a section on the form where the tenant has the right to indicate they disagree with the amount the landlord wants to keep and if this is identified then the landlord must file with the RTB for a hearing to keep those funds.
Two other aspects of this are when there is a dispute of the amount the landlords want to keep they are not required to return to the tenant any of the security deposit until the hearing is held and they are not allowed to keep any of the deposit until the hearing is held, as the arbitrator may award more or less of the amount identified. The other part which many landlords misunderstand is when a tenant disagrees and the landlord fails to file for a hearing within 15 days they could be subject to paying double the security deposit to the tenant.
It is important for landlords and tenants to understand during the move out inspection when you indicate the amount of funds you hold back from the security deposit. There is no option to have the tenants sign the form then indicate at a later date what the amount of the security deposit you are keeping from them. You also can’t perform the move out then collect the keys and revisit the property to evaluate the amount of damage and file a claim. In this scenario a tenant has no indication if damage was caused after they left the property.
When returning the security deposit landlords are required to send a copy of the completed move out form to the tenant along with the funds benign returned.
A good practice is when a tenant gives notice to vacate the property, visit the property to perform an inspection to identify any items that may need repair. This will give you the opportunity to obtain a quote for potential costs of the repair and then have a better understanding of how much you need to hold back from the security deposit.
When a tenant doesn’t show up to a scheduled move-out inspection, this doesn’t give landlords permission to keep the damage deposit. A landlord must complete the move-out report and either file with RTB to keep the deposit, or wait two years which is the limitation act requirements for filing a claim for a loss in BC. A tenant has two years as does a landlord to claim in court losses you have incurred. The difficult part here is when a tenant fails to attend you may not have their forwarding address to send documentation for a hearing. A landlord may be able to file using electronic communication if this has been agreed upon by the tenant as a form of communication for serving documents.
Completing the move out report even when the tenant fails to attend is very important. If the move-out inspection report wasn’t completed due to the tenant failing to attend the move out inspection and then the tenant applies to RTB within two years to have the security deposit refunded the Landlord needs to be able show they scheduled the move out, and performed the move out inspection. Without these two factors it is possible the RTB could rule in favour of the tenant to have the security deposit refunded. A condition inspection report has an important feature for the tenants which is where they need to indicate their forwarding address for the landlord to send the refunded security deposit.
In all hearings with the RTB they expect landlords to follow the rules and be professional during the transaction between landlords and tenants. Failing to perform the required steps shows lack of professionalism during the process. Landlords are held to a hire standard.
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