Landlord Question and Answer Forum

I have a slightly different situation regards a former tenants' security deposit. For several years I owned a small rental house in Wichita, Kansas that was leased annually to the same family who upon move-in paid the $500 security deposit I required. In March of this year I decided to sell this house (I still own another rental in Wichita) and sold it to a company. The company made an offer on the house within about 2 days of listing it and offered $2,000 less than asking price contending that on taking possession they intended replacing all the windows, the carpeting, etc. in the home and, since they were in the construction business, they could do this at minimal cost and would not be requiring sending in a building inspector. Time was of the essence to the buyer since the money used to purchase the house for cash came under some IRS ruling (I forget this minute the name/number of it) where if the profit from the sale of another property was re-invested within xxx (90?) days no capital gains tax would ensue. We were explicitly told not to replace or renovate and they understood that the tenants had been leasing for quite some time and normal wear and tear would have applied with regard to what would have been needed and what I would have done under normal wear and tear had I retained ownership. The tenants paid rent through to the end of May and gave notice to us and the pending new owner that they intended moving elsewhere. Under the contract of sale it was noted that no building inspection would take place and that the cash price to be paid was $2,000 less than the asking price. Initially, during the brief escrow period, the buyer requested I send him a check outside of escrow and not mentioned in the contract for the $500 security deposit we held. I refused to do this and, instead, after a telecon with a Wichita lawyer, I insisted that the $500 security deposit be spelled out in an amendment to the contract, including the names of the tenants who had paid it and that the new owner of the house receive the transfer of the $500 out of seller's proceeds at closing, which occurred. Yesterday I received a call from my former tenant advising me that 2 months have gone by since they moved out (as of the last day of this month) and the new owner had stalled about returning the security deposit, saying they would get back to the former tenants - but they never did. In following up on the lack of contact (and lack of return of the money) yesterday the former tenant again called the new owner and was told they didnt intend giving any money back since the place needed painting and various other things that the new owner was going to have to do and they seem to believe they are entitled to keep the entire $500. However, $2,000 of my money was taken off the price I realized from the home as an agreement at the buyer's request toward all the work they planned to do once the ownership of the home came into their possession. So basically they must have assumed the buyer would never be made aware of what was in the contract. I had no problem sharing the content of the contract with my former tenants. I know that 14 days and 30 days are key times with the return of security deposits in Kansas but my question is: Are the former tenants stuck with having to hire a private lawyer to get their money back or is their some resolution they can pursue through the State of Kansas itself? I am quite happy to provide them with whatever copies they need to show the content of my contract with the new owner when I sold him the property.

Do I return the deposit if there was a fire ?

Posted by Michael J, on Wednesday, January 12, 2022