How to decide on the return of a security deposit for an early termination of lease?

UPDATED: Apr 6, 2012

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How to decide on the return of a security deposit for an early termination of lease?

I have a rental property where 2 people had signed a lease for 1 year. A security deposit was collected from them. At the end of the lease term 1 of the tenants moved out and 2 other people replaced them. An extension was signed by all 3 tenants (1 old and 2 new). The security deposit from the original lease was carried forward to the extension. Then the 2 new tenants paid their share of the last month’s rent as a deposit to the old tenant. However, 1 of the new tenants moved out before the extension expired. Now they are demanding their deposit back from me. What should I do legally?

Asked on April 6, 2012 under Real Estate Law, Washington


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If the rental that you own has no problems with it physically, I would then return the the newest tenant's security deposit from him or her after you have completed your walk through of the unit and have all tenants sign off on the walk through in writing in order to prevent problems down the line.

Assuming you get a new tenant for the unit, then the new tenant can place a security deposit in is or her name for the premises. As to the two remaining tenants, since they are still in possession of the rental, they are not entitled to their security deposit back yet assuming the rental is not in a damaged condition.

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