Why I Never Do Move-out Walk-throughs with Departing Tenants

151222-landlordrenter-stockI recently had a tenant express frustration over the fact that I wouldn’t come meet him to conduct a final move-out walk-through at the rental property. I’ve been moving tenants in and out of Austin rental homes since 1990, and I’ve learned a few lessons in doing so. One is that there is no upside for a landlord in conducting a final walk-through with a tenant. Only bad outcomes can occur.

Namely, the tenant is going to want you to affirm or state that everything looks “ok” and that they’ll get all of their deposit back. Nowhere in Texas Property Code is this sort of “instant accounting” required. You’d be a fool to agree to say something like that, because a lot of possible damage is not discernible on a cursory walk-through.

Just a few examples off the top of my head are fleas that haven’t hatched yet, carpet stains that were scrubbed invisible that morning but will re-appear tomorrow, the dirty A/C filter your HVAC guy could find sucked up into air intake cavity (as I encountered last month), pet odors that are masked at walk-through but which return in a couple of days, the cat hair blanketing the refrigerator coil, and a long list of other possibilities.

Therefore, even if I wanted to, even if the place appeared to be in great condition with no visible problems, there is nothing I could or would say to a tenant with regard to whether the home “passes” inspection or not. The reason the tenant wants the walk-through – to receive assurances – simply can’t and won’t be provided.

And then, as I learned in the old days when I thought it made sense to do a move-out walk through, an argument ensues. So I just don’t go there anymore.

To better and more fully see my position, there are a few things one must understand.

First, as a Property Manager and Agent, I work for and represent property owners, not tenants. I therefore have a fiduciary duty to protect the interests of my owners by not committing errors in judgment that increase the owner’s legal exposure and potential liability.

Second, Landlords, as a business class, are sued more than any other type of defendant in small claims courts in America. Most of these lawsuits are about deposits and deductions that were made after move-out. Knowing that, a prudent landlord will always operate from a careful defensive position, remaining fair to the tenant, but not accommodating risky requests such as personal move-out walk-throughs.

The best defense against lawsuits is a well documented  accounting of what the specific deductions were and why the deductions were fair and justifiable.

The best way to end up with that type of documented paper trail, which can easily be handed to a JP Court Judge as evidence, is to employ a consistent and static turnover process that removes as many variables as possible. Of the many different variables a landlord might have to contend with in defending legitimate deposit deductions for damages and/or cleaning, the very worst and most problematic ones are the “He said, She said” type, where the landlord is placed in a position of having to refute things that in fact were never said, or that are being mischaracterized by the tenant.

And, finally, the best way to avoid “He said, She said” debates, is to simply not say anything in the first place. Instead, reduce all communications to documented written steps and stages so that when (not if) you do end up in court someday with a tenant, you have a nice packet of printed and easy to understand paper trail evidence that represents all communication that took place.

The very dumbest, worst thing a landlord can do is spend 30 minutes or so walking around a house with a departing tenant, trying to respond to comments/questions from the tenant such as “does everything look ok”? “So, we’ll be getting all of our deposit back”? “When will we be getting the deposit”? And my favorite, “it’s cleaner than when we moved in, so we expect all of our deposit back”.

You have lost control of the entire process as soon as you allow that to happen, and you have to assume that every utterance you make can and will be misconstrued and mischaracterized later if you end up in court. So just don’t go there.

I’ve accounted back the deposit for thousands of tenants in over 20 25 years of owning and managing rental homes in Austin. I’ve been to court a total of three four five times and have prevailed 100% each time. No tenant has ever convinced a judge that I’ve ever done anything wrong. My process works for me and it protects my owners.

A Well Documented Turnover Process
The turnover process begins at the moment written notice to vacate is received from or provided to a tenant. Instantly, upon receiving a move-out notice, I mail to our tenants a two page set of instructions documenting everything they need to know and do in order to have a successful departure and deposit refund.
Move-out Acknowledgment and Instructions

This sets expectations and clarifies for the tenant what was agreed to in the lease agreement and the process that will be followed.

After the tenant’s departure, I walk through the vacant property and check it out. Then I have a 150+ point preventative maintenance checklist that will be conducted and which will reveal problems or issues not readily apparent during a cursory walk-through. Only after this full and thorough evaluation of the property can a final assessment be made as to whether or not tenant damages exist that will be charged to the tenant deposit.

Conclusion: You control the process, not the tenant. Don’t have casual conversations about the deposit or condition of the property. Don’t attend a final walk-through. The tenant is free to take hundreds of digital photos, videotape, etc. if they want to document the final condition. You don’t need to be there. Keep everything in writing, stick to the process and don’t subject yourself to exposure or risk that Texas Property Code does not require of you.

Finally, be fair with the deposit, don’t be greedy or heavy handed. Be firm but fair. Remember you might end up in court defending yourself, and judges do give the benefit of doubt to tenants. Don’t be an idiot and get dragged into court over something that could have been avoided had you not been petty or greedy. For me, personally, I’ve adopted the policy of grading move-outs on a A, B, C, D, F scale. If a tenant does almost a perfect job on move-out, equivilent to a “93% Good”, I call that an “A” (using the 90-100 = A scale). Tenants who earn an “A”, through an honest effort, get 100% of their deposit back. I’m not going to pick a fight over a $65 worth of nit picking stuff. That’s stupid. Be a smart landlord or Property Manager, be fair.

Source: CrosslandTeam.com

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