I am the property manager for a property with three tenants. At the end of the lease term, one of the tenants decided to live alone and moved out. The two other tenants decided to sign a new lease and remain at the current rental property. The tenant that moved now wants her portion of the security deposit back. Because the lease requires that any refund of the security deposit be made payable to all tenants named in the lease, I am unsure how to handle the return or accounting of the security deposit for this tenant when two of the tenants are not leaving.

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  • I am the property manager for a property with three tenants. At the end of the lease term, one of the tenants decided to live alone and moved out. The two other tenants decided to sign a new lease and remain at the current rental property. The tenant that moved now wants her portion of the security deposit back. Because the lease requires that any refund of the security deposit be made payable to all tenants named in the lease, I am unsure how to handle the return or accounting of the security deposit for this tenant when two of the tenants are not leaving.

None of the tenants’ security deposit is due for refund or an accounting until 30 days after the remaining two tenants surrender the property. Generally, a landlord has a duty to refund and/or provide a written description and itemized list of all deductions on or before the 30th day after the day the tenant surrenders the rental property. “Surrender” is defined in paragraph 16 of the Residential Lease (TXR 2001) as “when all occupants have vacated the Property, in Landlord’s reasonable judgment, and one of the following events occurs: (a) the date Tenant specifies as the move-out or termination date in a written notice to Landlord has passed; or (b) Tenant returns keys and access devices that Landlord provided to Tenant under this lease.”

In a situation where there are multiple tenants in a rental property, “surrender” does not occur until the last occupant moves out. Even if one tenant has moved out of the property, returned the keys, given proper notice of termination, provided a written forwarding address and is not delinquent in rent, if the remaining tenants extend or sign a new lease with the landlord, the tenant would not yet be entitled to the security deposit because not all tenants have surrendered.

The remaining tenants may settle the splitting of the security deposit amongst themselves with the tenant who is vacating. This way the vacating tenant does not have to wait to see any refund or accounting of the security deposit and the property manager or landlord does not have to attempt to return a portion of the security deposit to the vacating tenant, especially when the landlord or property manager may not know what deductions may need to be taken out of the security deposit yet and because, under the lease, the tenants are jointly and severally liable for all provisions in the lease.

Source: TAR

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