Security Deposit Deduction for Missing Furniture
QUESTION: I am a property manager. A tenant recently moved out of a rental unit and the landlord is claiming that some furniture that was in the apartment is now missing. He wants me to deduct the value of that furniture from the tenant’s security deposit. The tenant has told me that the allegedly missing furniture was not in the apartment when he moved in. What should I do?
ANSWER: The duties owed by a broker-property manager to the owner-principal are exactly the same as the duties a seller’s agent or buyer’s agent owes to his or her principal under the law of agency and the North Carolina Real Estate License Law. The general rule is that when a principal employs a real estate agent, that principal is entitled to receive absolute loyalty and obedience from the agent. This means that the agent is expected to comply with all lawful instructions from the principal that are consistent with the terms of their agreement. An agent is not expected to follow a principal’s instructions to perform an unlawful act.
North Carolina has a Tenant Security Deposit Act that specifically outlines the permitted uses of a security deposit for residential dwelling units. Damage to the premises (beyond normal wear and tear) and nonfulfillment of the rental period are two examples of permitted uses.
In our view, the answer to your question depends on whether the furniture was understood by the parties to be a part of the leased premises. If the missing furniture was identified in the rental agreement, move-in inspection form or elsewhere, it would be legal for you to deduct for any damage to or disappearance of that furniture. In the absence of such identifying language, personal property would likely not be considered part of the premises and a deduction for missing personal property would not be lawful.
Please note that even if the lease makes no mention of furniture, your owner-principal is not without a remedy. He can always file a small claims action against the tenant and seek to recover the value of the furniture he claims is missing.
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