What To Do When a Tenant Does Not Return Keys
For beginner real estate investors, managing rental properties can present unexpected challenges. One common, albeit minor, issue that can arise is when a tenant moves out but fails to return the keys. While it might seem like a small detail, it can have implications for your property’s security and future re-renting efforts. Understanding the proper steps to take can save you time, effort, and potential headaches down the line.
Initial Steps and Documentation
The first thing to remember is the importance of documentation, a cornerstone of successful real estate investing. When a tenant moves out, even if the keys are not returned, the property is generally considered vacated if all their belongings are removed and the lease term has ended. However, the unreturned keys create a security concern.
- Review Your Lease Agreement: Your lease should ideally include clauses regarding key return, potential fees for unreturned keys, and procedures for move-out. A well-drafted lease is your primary defense in many tenant-landlord situations. According to a survey by Avail (now part of Realtor.com), 64% of landlords have experienced lease violations, highlighting the need for robust agreements.
- Document the Vacancy: Take photos or videos of the empty property, showing that all tenant possessions have been removed. This helps establish the official move-out date.
- Attempt Communication (Professionally): While the tenant may have moved out, a polite email or text message as a reminder can sometimes resolve the issue. Keep this communication brief and professional. Avoid accusatory language.
Security Measures and Rekeying
This is arguably the most crucial step when keys are not returned. The tenant still potentially has access to your property, which poses a security risk. Burglaries are a significant concern, with statistics from the FBI showing millions of property crimes annually. Protecting your investment is paramount.
- Rekey the Locks: Always rekey the locks when a tenant moves out, regardless of whether keys are returned. This is a best practice for any landlord. It ensures that previous tenants no longer have access and provides peace of mind for the next occupants. The cost of rekeying is relatively low, typically ranging from $40 to $100 per lock, a small price for enhanced security.
- Consider Smart Locks: For long-term efficiency and security, consider investing in smart locks. These allow you to remotely change access codes and monitor entry, eliminating the physical key return dilemma. Data suggests that smart home technology, including smart locks, is a growing trend among renters, potentially making your property more appealing.
Handling Deposits and Potential Fees
When it comes to the security deposit, adhere strictly to your state’s landlord-tenant laws. These laws dictate how and when a security deposit can be withheld.
- Security Deposit Laws: Most states allow landlords to deduct costs for damages beyond normal wear and tear from the security deposit. While an unreturned key isn’t “damage” to the property itself, the cost of rekeying due to the tenant’s failure to return keys can often be legitimately deducted. Check your local laws and your lease agreement for specific wording. For instance, California Civil Code Section 1950.5 outlines rules for security deposit deductions.
- Itemized Deductions: If you do deduct the cost of rekeying, provide the tenant with an itemized list of deductions, as required by law in most jurisdictions, along with the remainder of their security deposit. Send this within the legally mandated timeframe (e.g., 21 days in California, 30 days in New York).
Building a Robust Process for the Future
This experience, while minor, offers a learning opportunity to refine your processes for future tenants.
- Comprehensive Move-Out Checklist: Provide tenants with a detailed move-out checklist well in advance. This should explicitly include instructions for key return, cleaning expectations, and utility transfer.
- Key Acknowledgment Form: Consider having tenants sign a separate key acknowledgment form at move-in, detailing the number of keys received and the expectation for their return.
By following these steps, beginner real estate investors can efficiently manage situations where keys are not returned, ensuring the security of their investment and maintaining legal compliance.
FAQs
- Q: Can I charge a fee for unreturned keys?
A: Yes, if your lease agreement explicitly states a reasonable fee for unreturned keys and it is permissible under your state’s landlord-tenant laws. - Q: How long should I wait before rekeying if the keys aren’t returned?
A: As soon as the property is officially vacated and the lease term has ended, it’s best to rekey immediately for security reasons. - Q: Do I need to notify the tenant before deducting rekeying costs from the security deposit?
A: While direct notification of the deduction may not be legally required before the final accounting, you must provide an itemized list of deductions when returning the remainder of the deposit. - Q: What if the tenant mails the keys back eventually?
A: By that time, you should have already rekeyed the locks for security purposes. You are not obligated to undo the rekeying if the keys arrive late, assuming you acted reasonably. - Q: Is replacing the locks the same as rekeying?
A: No. Rekeying involves changing the internal pins of the lock so a new key works, while replacing involves installing an entirely new lock fixture. Rekeying is typically more cost-effective. - Q: What if the tenant claims they left the keys inside the property?
A: Unless you can verify this immediately, for security, it is still advisable to rekey. It’s difficult to prove whether keys were left unless they are in a clearly designated spot. - Q: Does this situation affect my ability to re-rent the property?
A: It shouldn’t significantly, as long as you promptly address the security issue by rekeying. Future tenants will expect new locks anyway.
Bottom Line
For beginner real estate investors, an unreturned key from a vacating tenant is a minor issue that is best handled proactively by immediately rekeying the property. This ensures security, protects your investment, and allows for a smooth transition to the next tenant. Always document your actions and adhere strictly to your lease agreement and state landlord-tenant laws regarding security deposits.