 Security Deduction (by Sharon [NJ]) Sep 22, 2017 4:04 AM
 Security Deduction (by WMH [NC]) Sep 22, 2017 4:37 AM
Security Deduction (by S i d [MO]) Sep 22, 2017 5:21 AM
Security Deduction (by S i d [MO]) Sep 22, 2017 5:24 AM
Security Deduction (by Tony [NJ]) Sep 22, 2017 6:07 AM
Security Deduction (by Sharon [NJ]) Sep 22, 2017 7:31 AM
Security Deduction (by NC INVESTOR [NC]) Sep 22, 2017 9:30 AM
Security Deduction (by TA [CA]) Sep 22, 2017 11:36 AM
Security Deduction (by AllyM [NJ]) Sep 23, 2017 8:32 AM
Security Deduction (by Sharon [NJ]) Posted on: Sep 22, 2017 4:04 AM
Message:
State Specific Question About: NEW JERSEY (NJ)
Can a landlord deduct or charge a 1% or more 'admin' fees on a security deposit?
What are the rules on this?
Assume money was kept in cash in a moneymarket account (because the fees of buying a fund outweighed the income) or in a moneymarket fund.
I'd like to know either way. Just the facts, without judgement.
Thanks --108.171.xxx.xxx |
Security Deduction (by WMH [NC]) Posted on: Sep 22, 2017 4:37 AM
Message:
I've never heard of that - in most states a Security Deposit can be used only for damages, financial or otherwise. Check your state laws. --173.22.xx.xx |
Security Deduction (by S i d [MO]) Posted on: Sep 22, 2017 5:21 AM
Message:
Don't call it an admin fee...too easy to argue. Rather, figure out whatever your costs are and simply include that as part of the standard charge per item.
Example 1: The easy way
* 4 missing light bulbs @ $5 per bulb
Total: $20
Example 2: Way that tenants will argue with & judge may disallow.
* 4 missing light bulbs @ $2.50 per bulb materials.
* install 4 missing light bulbs @ $.50 per bulb labor.
* Admin fee $8
Total:$20
Get to the same number w/o the drama! K.I.S.S.
--173.19.xx.xxx |
Security Deduction (by S i d [MO]) Posted on: Sep 22, 2017 5:24 AM
Message:
Btw, I know you were specifying the 1% as a fee for having to "handle" their security deposit...adding in that silly 5 cents per year interest the law forces us to fiddle with, book keeping, etc. It still works the same way. A sensible business solution is to "bake in" all of your overhead/admin fees into your regular costs.
Look at a plumber's bill. He doesn't charge you for every washer or o-ring as a line item (I hope!). No...he just sends you "the bill". Installed water heater: : $800. That number includes his gas, wear and tear on truck, drive time, tools, cost of his invoice, computer system, printer paper, janitor, etc. All of those costs and many more are baked into the $800 fee for the water heater. You can do the same with your security deposits and every other "soft" cost you have.
Clean, simple, easy to understand, efficient. --173.19.xx.xxx |
Security Deduction (by Tony [NJ]) Posted on: Sep 22, 2017 6:07 AM
Message:
There is a state specific answer here. NO . Actually we could deduct 1% years ago but that changed when int rates dropped below 1%. There are banks or credit unions with simple pass book or other savings accounts, all paying under 0.5%. We are required to put the sec deposits in an interest bearing NJ thrift institution and actually pay that interest to the tenant on each 1 year anniversary. We cannot retain any type of admin fee. --73.195.xxx.xxx |
Security Deduction (by Sharon [NJ]) Posted on: Sep 22, 2017 7:31 AM
Message:
Thanks Tony- that's what I was looking for... I remember the 1% rule.. --95.172.xxx.xx |
Security Deduction (by NC INVESTOR [NC]) Posted on: Sep 22, 2017 9:30 AM
Message:
Thankfully we are advised to never use interest-bearing accts. so we don't. However, I have seen where some LL's have tried to charge for the cost of the SD final accounting and the courts feel that is part of our job.
We do break out charges since the courts want to see that.
We use a combination of Sid's examples:
replace 4 light bulbs @$5.00/bulb includes materials and labor
The courts recognize reasonable labor charges whether we do it ourselves or hire it out. For a larger expense we will breakout the materials and labor for that expense item. For instance if we have to replace carpet due to tenant negligence we definitely breakout the costs of materials, install cost/sy and disposal fees --75.181.xxx.xx |
Security Deduction (by TA [CA]) Posted on: Sep 22, 2017 11:36 AM
Message:
Generally you cannot deduct your costs of doing business and general wear and tear from security deposits, only damages. You will have to look at your local laws and how the judges interpret to see if there is anything specifically allowing admin fees. CA is clear that the entire deposit must be refundable and admin fees are not an allowable deduction. --75.149.xx.x |
Security Deduction (by AllyM [NJ]) Posted on: Sep 23, 2017 8:32 AM
Message:
Google Truth in Renting. It's a booklet from the Dept of Community Affairs in Trenton and supposed to be given to all tenants. Publication date is 2010 so there may be a new regulation not in it. It does say you can deduct for administration of the account but I would never do that as it risks making a mistake and the penalty for making a mistake is that you pay the tenant double there security deposit. Not a good risk. --73.33.xxx.xxx |
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