1. MAKE SURE YOU HAVE THE LEGITIMATE REASON FOR KEEPING DEPOSIT
Review your state and local laws regarding security deposits as they are different from state to state.
Laws of all states allow landlords to collect a security deposit when the tenant moves in to their property. A lot of states limit the amount property owners can charge, which typically isn't more than a month or two worth of rent - the exact amount a landlord can ask for depends on the state.
Mostly, security deposits are equal to the first month rent and even the last month rent together. Make sure all fees are clearly explained in the lease or rental agreement and whether you have a reason as defined by your state law to keep a tenants' deposit.
Damaged apartment or violated lease terms are two most common reasons Landlords may keep tenant’s security deposit. If the reason of withholding a tenant’s security deposit is legal in your area, then consider informing your tenant you are allowed to keep their deposit for the reason you have stated legally. Also ensure you have followed your state ordinances correctly in order to prevent force security deposits returns.
2. BACK UP YOUR CLAIMS!
Even if the reason of keeping your tenants deposit is legitimate you have to claim the damages by pictures documenting the apartment before the tenant moved in and after they moved out. Also, you have to present estimated cost of a repair. If the tenant has broken the lease in another way, like disturbing neighbors or excessive noise, you will need the evidence of that fact too. If you have sufficient facts to prove your claim, then provide them to your tenant. After a fair number of arguments your tenant may give up, or may want to recover the money and try to sue you in small claims court.
3. ARE YOU WILLING TO GO TO COURT?
Even if you have proven your rightness and the reason of withholding tenant’s security deposit is legal in your state, your angry tenant may still want to sue you in small claims court to get this money back.
However, before you are going to the small claims court, make sure that the sum you are fighting for is worth it. It often depends on how much your tenants owes. If you are fighting over $300, wasting whole day in court, think if it a justified compensation for your time and nerves. Sometimes it's better to give the tenant that $300 and deal with a problem peacefully. Still, if you are confident that everything is done correctly and legally then go to the court and bring the truth to light but make sure that everything is lawful or better consult with an attorney.