By John Adams
I have copied certain portions of the LL-Tenant Law word for word, and I want to point out a few details that are often overlooked by non-attorney landlords:
… an agent or other person authorized to enter into a rental agreement on behalf of the landlord shall disclose to the tenant in writing the names and addresses of the following persons:
(1) The owner of record of the premises or a person authorized to act for and on behalf of the owner for the purposes of serving of process and receiving and receipting for demands and notice; and
(2) The person authorized to manage the premises.
Thus it is CLEAR that there is no requirement to reveal the name or address of the OWNER. If you choose to NOT reveal the name of the OWNER, you must state in the lease the name of another person who is authorized to act for and on behalf of the owner for the purposes of serving of process and receiving and receipting for demands and notice.
I have had PLENTY of real estate brokers tell me it was required by law to reveal the name and home address of the owner of record. That is wrong.
§ 44-7-31 – Placement of security deposit in trust in escrow account; notice to tenant of account location
O.C.G.A. 44-7-31 (2010)
44-7-31. Placement of security deposit in trust in escrow account; notice to tenant of account location
Except as provided in Code Section 44-7-32, whenever a security deposit is held by a landlord or such landlord’s agent on behalf of a tenant, such security deposit shall be deposited in an escrow account established only for that purpose in any bank or lending institution subject to regulation by this state or any agency of the United States government. The security deposit shall be held in trust for the tenant by the landlord or such landlord’s agent except as provided in Code Section 44-7-34. Tenants shall be informed in writing of the location of the escrow account required by this Code section.
LOCATION does not include the account number. The location is the name of the financial institution where the deposit is located. Example: QUALITY NATIONAL BANK, Atlanta, Georgia.
This part of the LL-tenant relationship is the one most often responsible for unhappiness and disappointment. I strongly recommend that you almost memorize this section, and that you review it before you offer a property and as soon as a tenant give you notice they are moving. STRICT ADHERENCE is MANDATORY.
You will notice that my MOVE IN MOVE OUT INSPECTION LIST which I have provided to you uses most of this language word for word. That is not an accident. Let’s take a look:
(a) Prior to tendering a security deposit, the tenant shall be presented with a comprehensive list of any existing damage to the premises, which list shall be for the tenant’s permanent retention. The tenant shall have the right to inspect the premises to ascertain the accuracy of the list prior to taking occupancy. The landlord and the tenant shall sign the list and this shall be conclusive evidence of the accuracy of the list but shall not be conclusive as to latent defects. If the tenant refuses to sign the list, the tenant shall state specifically in writing the items on the list to which he dissents and shall sign such statement of dissent.
The reason the procedure is so important here is that we want to gain the support of the law that the LIST is correct and that it is “conclusive evidence,” as opposed to any other evidence. So let’s say a tenant shows up in court contesting your security deposit charges for repairs to the carpet for burns in front of the fireplace. If the MOVE IN LIST is handled properly and sign by both parties in a timely manner, then the LIST is conclusive. That means if there is no mention of carpet burns when they moved in, they owe you for it. This is EXTREMELY powerful evidence in your favor.
(b) Within three business days after the date of the termination of occupancy, the landlord or his agent shall inspect the premises and compile a comprehensive list of any damage done to the premises which is the basis for any charge against the security deposit and the estimated dollar value of such damage. The tenant shall have the right to inspect the premises within five business days after the termination of the occupancy in order to ascertain the accuracy of the list. The landlord and the tenant shall sign the list, and this shall be conclusive evidence of the accuracy of the list. If the tenant refuses to sign the list, he shall state specifically in writing the items on the list to which he dissents and shall sign such statement of dissent. If the tenant terminates occupancy without notifying the landlord, the landlord may make a final inspection within a reasonable time after discovering the termination of occupancy.
There’s a lot to unpack in the above paragraph. Let’s take it one by one:
(c) A tenant who disputes the accuracy of the final damage list given pursuant to subsection (b) of this Code section may bring an action in any court of competent jurisdiction in this state to recover the portion of the security deposit which the tenant believes to be wrongfully withheld for damages to the premises. The tenant’s claims shall be limited to those items to which the tenant specifically dissented in accordance with this Code section. If the tenant fails to sign a list or to dissent specifically in accordance with this Code section, the tenant shall not be entitled to recover the security deposit or any other damages under Code Section 44-7-35, provided that the lists required under this Code section contain written notice of the tenant’s duty to sign or to dissent to the list.
The great news here is that, IF you provide the MOVE OUT INSPECTION in a timely manner, and IF the original MOVE IN INSPECTION LIST contained notice of the tenants duty to sign or dissent, and IF the tenant failed to dissent and notify landlord of such dissent in a timely manner, then the tenant is BARRED from attempting to recover the security deposit or any other damages. Trust me on this one, if you do your job in a timely manner, it is simply UNLIKELY that the tenant will do the same. But if you get sloppy and hope that the departing tenant won’t notice, look out!
If the reason for retention is based on damages to the premises, such damages shall be listed as provided in Code Section 44-7-33. When the statement is delivered, it shall be accompanied by a payment of the difference between any sum deposited and the amount retained. The landlord shall be deemed to have complied with this Code section by mailing the statement and any payment required to the last known address of the tenant via first class mail. If the letter containing the payment is returned to the landlord undelivered and if the landlord is unable to locate the tenant after reasonable effort, the payment shall become the property of the landlord 90 days after the date the payment was mailed. Nothing in this Code section shall preclude the landlord from retaining the security deposit for nonpayment of rent or of fees for late payment, for abandonment of the premises, for nonpayment of utility charges, for repair work or cleaning contracted for by the tenant with third parties, for unpaid pet fees, or for actual damages caused by the tenant’s breach, provided the landlord attempts to mitigate the actual damages.
Three items we need to discuss:
REMEDIES FOR LANDLORDS NON-COMPLIANCE with SECURITY DEPOSIT PROCEDURE:
44-7-35. Remedies for landlord’s noncompliance with article
(a) A landlord shall not be entitled to retain any portion of a security deposit if the security deposit was not deposited in an escrow account in accordance with Code Section 44-7-31 or a surety bond was not posted in accordance with Code Section 44-7-32 and if the initial and final damage lists required by Code Section 44-7-33 are not made and provided to the tenant.
Pretty simple: USE AN ESCROW ACCOUNT and make and provide the MOVE IN MOVE OUT lists in a timely manner. Failure to do so prevents you from retaining ANY PORTION of a Security Deposit for any reason.
(b) The failure of a landlord to provide each of the written statements within the time periods specified in Code Sections 44-7-33 and 44-7-34 shall work a forfeiture of all his rights to withhold any portion of the security deposit or to bring an action against the tenant for damages to the premises.
LET ME RESTATE: USE AN ESCROW ACCOUNT and make and provide the MOVE IN MOVE OUT lists in a timely manner. Send them their NOTICE OF WITHHOLDINGS letter in a timely manner. DOCUMENT these things!! Failure to do so prevents you from retaining ANY PORTION of a Security Deposit for damages.
(c) Any landlord who fails to return any part of a security deposit which is required to be returned to a tenant pursuant to this article shall be liable to the tenant in the amount of three times the sum improperly withheld plus reasonable attorney’s fees; provided, however, that the landlord shall be liable only for the sum erroneously withheld if the landlord shows by the preponderance of the evidence that the withholding was not intentional and resulted from a bona fide error which occurred in spite of the existence of procedures reasonably designed to avoid such errors.
Ok, this could actually happen: your tenant buys a new sledge hammer, and decides to tear down all the interior walls and make one big room. In addition, he busts out all the windows. Then he notifies you he is moving out.
You are understandably stunned, but you decide to keep his $995 Security Deposit and also sue him for damages of $45,000. Seems reasonable to me.
Meanwhile, he meets with LEGAL AID and it turns out you never gave him a MOVE IN INSPECTION FORM for his permanent retention, and he can prove it (you forgot).
The result is this:
not only MUST you refund him his $995 security deposit, but now you are BARRED from seeking any financial relief for repairs, PLUS you also owe him THREE TIMES the $995 as punishment for failing to perform your duties in a timely manner. That is $40,000 in damages, plus a refund of $995, plus a penalty of $2,985 for not making the refund in a timely fashion.
DON’T LET THIS HAPPEN TO YOU!
TACK & MAIL DEFINED:
If the sheriff is unable to serve the defendant personally, service may be had by delivering the summons and the affidavit to any person who is sui juris residing on the premises or, if after reasonable effort no such person is found residing on the premises, by posting a copy of the summons and the affidavit on the door of the premises and, on the same day of such posting, by enclosing, directing, stamping, and mailing by first-class mail a copy of the summons and the affidavit to the defendant at his last known address, if any, and making an entry of this action on the affidavit filed in the case.
There is nothing particularly exciting about this part of the OCGA, except that all dispossessory court judges are very familiar with it, so they like it.
What that means for you and me is that we can likely rely on this as a substitution for certified mail in almost every situation calling for NOTICE. This is especially important in making your DEMAND NOTICE prior to filing a dispossessory action, because tenants often say they never received a demand notice. You can say all day long that you mailed it or that you handed it to him, but at that point it’s just your word against his. In contrast, if you have a demand notice that conforms to this procedure, the judge is likely to recognize the verbiage and grant your request to allow your dispossessory to proceed. Yes, I have seen this happen.
You will notice that on the DEMAND NOTICE I have provided for you, there is a fill in the blank portion at the bottom that mirrors this verbiage word for word. Make sure you use it to protect yourself.