Landlord Ordered to Return Security Deposit to Problem Tenants

by Chris on May 7, 2012

A landlord in British Columbia was ordered to return a security deposit to tenants who left the unit a mess because of a mistake made during dispute resolution.

The tenants had paid a $725 deposit to the landlord when they moved in. Two years later, the tenants left owing money, and without cleaning the rental property.  The unit required 11 hours of cleaning and repairs.  The landlord claimed damages of $875.60, but offered this itemization, totalling over $1,000:

$112 for carpet cleaning
$154 for general cleaning
$30.80 for cleaning materials
$336 for painting
$117 for painting materials
$100 for filling 2 holes in walls
$179.20 for furniture removal.

The landlord filed for dispute resolution in order to apply the security deposit and claim additional damages.

The landlord submitted this evidence is support of the claim: photos of the rental unit, a security deposit refund worksheet, move-in and move-out inspection reports, and the tenancy agreement. However, the landlord did not provide receipts, invoices or records of payment made. The tenants did not appear at the hearing.

The Dispute Resolution Officer found that in order to claim the right to deduct the items from the security deposit, the landlord must show:

The damage or loss occurred;
The tenants caused the damage or loss;
The actual amount of the loss is clearly established; and,
The landlord took steps to mitigate the losses.

The DRO indicated that the landlord suffered a loss,  the tenants caused that loss, and the landlord took steps to mitigate the loss.  However, it was determined that, without the receipts, the landlord failed to clearly establish the actual amount of the loss.

As a result, an order was entered for the return of the entire security deposit, and the  landlord’s application was dismissed, without leave to reapply.

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{ 6 comments… read them below or add one }

Trevor May 8, 2012 at 5:20 am

Sure wouldn’t want to be a landlord in BC!

Steven May 8, 2012 at 6:36 am

What’s wrong with that judge. Is he pro tenant

Kenny May 8, 2012 at 7:17 am

The law is clearly biased in favour of tenants – The DRO should have asked the Landlord to provide receipts, which the Landlord can (at least for some of the expenses) and photos of the damage.

Marv May 8, 2012 at 10:34 am

That was a hard lesson to be learned and an even harder pill to swallow for the landlord, I know that it would be for me.
As you can see that in instances like this, there is no common sense or reasoning applied to the decision making process with the DRO…just my opinion. Bottom line I guess…ignorance is no excuse, clearly that is the message here!
I hate to keep harping on this, but what happened to the landlord in this instance can be alleviated in most instances by developing a criteria, having a checklist, and knowing what you need going into a dispute resolution. The screening process is also an important aspect to preventing this from happening in the first instance. If you have a good screening process then I strongly believe that your minimize your risk of this happening to you.
1.) Determine credit & tenant worthiness–call the current and previous landlord, any problems with rent payment? Was security deposit returned? etc.
2.) Have the prospective tenant read and sign the Notice to Tenant and advise that you report tenant pay habits and any debt left outstanding that includes cleaning fees and damaged rental property to a credit reporting agency which is TVS. This makes an impact statement to the prospective tenant…which is “I take seriously my landlord business, and you should take seriously your tenant responsibilities”.
3.) Conduct a periodic inspection of the rental property to make sure that it is being maintained to your criteria/standards. Don’t let the tenant get away with not maintaining your rental property. Check on it. Refer to previous article “Landlord Does it Right! In popular posts on this blog.
I’m sure that there are many EXPERIENCED landlords/property managers out there that can add their words of wisdom here as well. Let’s all help to educate each other. 🙂

Mark Buehler May 8, 2012 at 5:21 pm

I have had rental properties in BC and Alberta for decades. What this landlord did to protect his property was as much as some experienced landlord do and less than most. His estimates for cleaning and repair if anything were on the low side. I have never been involved in a dispute resolution and if this is any indication of what to expect I can see why most landlords would want to avoid it. What a waste of time and energy. Clearly the RTO in BC is strongly encouraging you to cut your losses and not bother them. The only recourse I would suggest to this or any other landlord in a similar situation is to drag out returning the DD as long as you can and then try to negotiate a payment plan claiming hardship if at all possible. Somewhere along the lines of say $10/month:)

Bill June 5, 2012 at 12:31 pm

It definitely seems like the onus to prove everything is always dropped on the landlord. That’s why it’s so important to make sure a landlord documents everything and has everything in order when dealing with tenants.

Marv has some great points about making sure tenants understand you take your business as a landlord seriously and to do periodic inspections. Both of these tactics will help separate you from amateur landlords and help prevent excessive damage to your property if tenants neglect to mention small issues that can lead to larger issues.

And Mark, many provinces have different laws and rules about how and when DD’s have to be returned to tenants. By dragging it out and not paying as the “rules” are laid out you can open yourself to fines and extra incurred costs.

Bill

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