Couple breaking up, security deposit question

[sudofdisk]

The state is Colorado.


I have two tenants signed to a lease. The lease is now month to month. One of the tenants has provided written notice that they would no longer be continuing the lease. She has not yet told the other party on the lease but has assured me she would inform him with greater than thirty days left in order for him to be able to decide if he wanted to give notice.

I freely admit that I am a landlord by circumstance (I am renting out a former living place) and I don't really know what I am doing.

How am I supposed to handle the security deposit from here?

I presume (feel free to correct me if I am wrong) that this means the existing lease is completely dissolved and if he wants to sign a new one I am willing to allow that. I think that means the original security deposit is returned and a new one due as this is a new lease.

My difficulty is who do I give the security deposit refund to? I think she is going to want half and I fear he is going to claim that since the check came from him he gets it.

I am trying to get ahead of this, maybe it will be more amicable, I am just trying to be prepared.

Thank you in advance for any advice.

 

[xylene]

I think you should hire a property manager and a lawyer.

Why did you think the one tenant could demand to be released separately?

 

[adjusterjack]

who do I give the security deposit refund to?

Right now, you don't give it to anybody. You hold it until both tenants are out and the property and the keys are surrendered to you. Then you apply the deposit to any damage left behind and you put both their names on the check.

How they handle it is between them.

Meantime, study up on the Colorado landlord tenant statute, especially the security deposit section.

https://law.justia.com/codes/colorado/2018/title-38/tenants-and-landlords/article-12/

I freely admit that I am a landlord by circumstance (I am renting out a former living place) and I don't really know what I am doing.

Then sell the place as soon as both tenants are out.

 

[Zigner]

I freely admit that I am a landlord by circumstance (I am renting out a former living place) and I don't really know what I am doing.

You are a landlord by choice. You chose to rent out your former living space instead of selling it.
A landlord by "circumstance" is more along the lines of an inherited property or taking guardianship/conservatorship of a person who is a landlord (although both are still choices, just much tougher choices).

 

[Stephen1]

You could have the guy want to remain in the unit and assuming that you are willing to continue to rent to him here is what I have done in similar situations. First of all, you will need to talk to both about the deposit and how they view things. I offered the options of (1) the full deposit remains on the unit, it transfers into his name, they work out how much of it she gets and he pays her that amount; (2) I do a walk-through (it is really hard to assess an occupied unit), pay her her half, he has to come up with an equal amount to me before the new agreement is in place. Yes, I got something in writing from her in regard to that first option and I did send her the required letter about the deposit.
I once had several college kids in a unit. Shortly after signing the lease one of them moved out of the area and a new person took her place. I thought it would be simpler if I just waited until everyone was out to come up with how much they got back. My advice: It is not simpler. Do it now.
Now a topic that hasn't yet been addressed if both are moving out: one check or two checks, written to whom? If they agree, then send each his/her own check (two checks). Or they might agree that 100% goes to a specific tenant - one check. Without an agreement I send one check with both names on it as "A and B". They both have to sign it to cash it. Not your problem how they divide it up. In any case, the required statement/letter detailing what happened with the deposit goes to both of them.

 

[zddoodah]

How am I supposed to handle the security deposit from here?

Subject to the specific terms of your lease, you are likely entitled to retain 100% of the security deposit until the tenancy is terminated. If you used any sort of standard lease form, the the tenancy doesn't terminate until all tenants have vacated the premises and surrendered possession by giving you the keys. As long as any of them remains in possession, you are likely entitled to retain 100% of the security deposit.

I presume (feel free to correct me if I am wrong) that this means the existing lease is completely dissolved and if he wants to sign a new one I am willing to allow that. I think that means the original security deposit is returned and a new one due as this is a new lease.

That's certainly an option if the guy wants to stay in the premises.

My difficulty is who do I give the security deposit refund to?

When the time comes to return the deposit, unless you get written instructions to the contrary, signed by both tenants, you make the check payable to "[Tenant 1] and [Tenant 2]."

I fear he is going to claim that since the check came from him he gets it.

Who wrote the check for the deposit isn't at all relevant unless the express terms of the lease make it relevant.

 

[FarmerJ]

What you may want to do is to send him a written on real paper letter telling him she has given to you her written notice that she will be vacating and you would like to know ahead of time if he would like to stay on or if he will be moving as well. Don't talk about the deposit yet. send it via confirmed mail delivery with a copy you keep stapled to your postal receipt.

 

[sudofdisk]

Why did you think the one tenant could demand to be released separately?

Because they are on a month to month lease. If one tenant wants to give notice should they not be able to?

When the time comes to return the deposit, unless you get written instructions to the contrary, signed by both tenants, you make the check payable to "[Tenant 1] and [Tenant 2]."

This seems like the simplest solution, then it is not my problem.

Thank you all for your advice.