The application procedure is to be implemented by the ...



To ensure a smooth move-out process, a good resident/management relationship should be established at initial occupancy. It is important that the resident is made fully aware of the procedures that are to be followed upon vacating the apartment.

What does the law allow?

If the resident gives a 30 day written notice, then the resident’s security deposit should be refunded after any outstanding charges or fees are paid.

If the resident gives a 30 day notice and is delinquent with the rent, the resident’s security deposit should be applied/refunded as follows.

➢ Past due rent

➢ Damages

If the resident does not give 30 days notice or does not fulfill a full one year lease term (even if they give a 30 days notice), the security deposit is forfeited. The resident should be charged for the following.

➢ Past due rent

➢ Damages

➢ Forfeitures

In order for the resident to secure the return of the security deposit, the following procedures should be followed.

RESIDENT NOTICE TO VACATE (Form I-2)

In order to be eligible to receive any security deposits upon move-out, a resident must:

give a written thirty day (30) day notice with rent payment (if applicable),

have fulfilled a full one year lease term,

provide you with a forwarding street address, city, state, and zip code.

Upon receipt of the notice to vacate, the reason for the move should be determined, if possible. This will help with future marketing efforts and identify problems, that when corrected, may prevent other residents from moving. Every effort should be made to retain the resident. If it is determined the move is valid, further move-out procedures should be discussed.

Then, in Yardi change the resident status from current to notice. Follow the Yardi procedures manual to complete this task.

MOVE-OUT INSPECTION

An accurate inspection of the apartment, recorded on the Move-In/Move-Out Inspection Form (Form F-19) by the Community Manager together with the resident (if available) is necessary to determine damages with specificity beyond normal wear and tear. This form is initially completed at move-in (which is filed on the left side of the resident folder), but the remaining part should be completed at the move-out inspection. The inspection should be completed only after all personal belongings are removed from the apartment. The resident is responsible for the cleaning of the entire apartment. This includes, but is not limited to:

the cleaning of all bathrooms and fixtures,

kitchen and appliances,

trash removal throughout the apartment,

vacuuming of carpets.

The Community Manager should review this form to see if there were any damages or items of normal wear and tear that were listed on the Move-in side of the Move In and Move Out Form. If so, the Community Manager should not charge the resident for these damages at move-out. All Community Managers will complete the move-out inspection with a legal pad and digital camera to record all damages both in writing and in photographs, and also write down items that are normal wear and tear.

If a resident has lived in an apartment for one (1) full year or more, the resident will not be charged for the first coat of paint. If a resident has not lived in an apartment for 1 full year and the unit needs paint, the costs of paint will be charged against security deposit. NOTE: if the resident has fulfilled the one year lease but the apartment needs to be painted due to heavy smoke damage the resident will be charged for the cost to repaint based on the expected useful life of the paint (which is 5 years).

Community Managers should expect to get an apartment back in the same condition that the apartment was given to the resident, less normal “wear and tear”. Three items that are automatically completed upon move-out are locks are changed, apartment painting and carpet cleaning. The resident should not be charged for these items unless the resident is responsible for things such as keys not turned in, marks or holes on the walls, stains or rips on the carpet, not living in unit for at least one year, walls discolored due to heavy smoking, etc.

When the move-out inspection is complete, the community manager should:

1. record all damaged items on the move-out side of the Move In and Move Out Form,

1. review all damages with resident and get resident, if available, to sign Move In and Move Out Form if resident is available to sign.

WORK ORDERS

Upon completion of the move-out inspection the community manager should immediately enter work orders in Yardi for the following:

Enter a work order for each of the damages recorded on the move-out side of the Move In and Move Out form. Attach a picture of the damage to the work order. The work order number should be recorded by each of the damages on the move-out side of the Move In and Move Out Form. (The rationale for this paper work is that it is easier to track a work order for one repair than a work order with several repairs requiring several different disciplines, i.e. painter and carpet installer).

Enter a work order for each item of normal wear & tear found in the apartment that the Community Manager indicated during the move-out inspection.

Some examples of charges are identified below:

Example: Resident has lived in apartment 2 years. When the resident moved-in the carpet was new. When the Community Manager completes the Move-out side of the Move In and Move Out Form, it is determined that the carpet needs to be replaced. Who is charged?

If the life of carpet is seven (7) years and the cost to replace the carpet is $700, then the cost per year is $100. You would charge the resident for the unused portion (5 years) or $500 as damage and the property would pay the $200.

Example: Resident has lived in apartment 5 years. When the resident moved-in the counter top was 8 years old. When the Community Manager does the Move-out side of the Move In and Move Out Form, it is determined that the counter top needs to be replaced due to a burn from a pot. Who is charged?

If the life of counter top is twenty (20) years and the cost to replace the counter top is $1,000, then the cost per year is $50. You would charge the resident for the unused portion (7 years{20-5-8=7}) or $350 as damage and the property would pay the $650.

Example: Resident has lived in apartment 1½ years. When the resident moved-in the apartment was freshly painted. When the Community Manager does the Move-out side of the Move In and Move Out Form, it is determined that the walls are discolored due to heavy smoke and needs to be repainted with two coats of paint. Who is charged?

If the life of the paint is five (5) years and the cost to repaint the walls is $500, then the cost per year is $100. You would charge the resident for the unused portion (5 years) or $350 (500-100-50=350) as damage and the property would pay the $150.

Example: Resident has lived in apartment 1½ years. When the resident moved-in the apartment was freshly painted. When the Community Manager does the Move-out side of the Move In and Move Out Form, it is determined that the walls are good condition but needs one coat of paint. Who is charged?

If the life of the paint is five (5) years and the cost to repaint the walls is $500, then the cost per year is $100. You would not charge the resident for any of the cost to repaint because they have lived in the unit over one year, therefore, the property would pay the entire $500.

Example: Resident has lived in apartment 4 years. When the resident moved-in the refrigerator was 5 years old. When the Community Manager does the Move-out side of the Move In and Move Out Form, it is determined that the refrigerator gasket needs to be replaced. Who is charged?

The property would pay for the new gasket and the resident would not pay anything.

Example: Resident has lived in apartment 7 years. When the resident moved-in the stove was 2 years old. When the Community Manager does the Move-out side of the Move In and Move Out Form, it is determined that the stove top scratched heavily due to use of brillo pad and the oven is dirty and it is determined that the stove needs to be replaced. Who is charged?

If the life of the stove is fifteen (15) years and the cost to replace the stove is $350, then the cost per year is $23.34. You would charge the resident for the unused portion (6 years {15-7-2}) or $140.04 (23.34*6) as damage and the community would pay the $209.96.

If it is determined that the stove does not need to be replaced you would still charge the resident for the damages identified above but also charge them the appropriate cleaning charge.

Remember that when you are charging residents for damages/cleaning that you refer back to your charge listing to allocate the appropriate charge(s).

Copies of all the work orders that were related to the make ready should be filed in the resident’s move out file and originals are to be filed in the onsite work order folders. This includes pictures of unit and both resident charges and non-resident charges work orders.

At this time you MUST go into Yardi and set up any damage charges the resident incurred. Please refer to your Yardi procedures manual for assistance with setting up one-time charges.

MOVE OUT IN YARDI

Now that you have completed the Move In and Move Out Form and written the necessary work orders you are ready to complete the move out process in Yardi. Please refer to your Yardi procedures manual for step by step instructions on how to complete the move out in Yardi.

NOTE: This step is very important. Remember on the move out HUD 50059 to change the transaction effective date to the date of the move out. Failure to do this will cause hours of additional work for your Accounting Specialist. This process will change the resident status from notice to past resident. If the resident passed away, the family has 14 days from date of death to remove all belongings and return keys to Management. Any days beyond the 14 days are to be charged to the resident’s estate at Market Rent.

HUD NOTICE OF REGULAR VACANCY (Form I-3)

This form can be printed from Yardi, please see Yardi procedure manual for step-by-step instructions. Once this form is printed from Yardi and completed, then mail to either the local HUD office or the South Carolina State Housing Finance and Development Authority (SCSHFDA). If your property is assigned to a Contract Administrator (SCSHFDA) then it is mailed to your asset manager at SCSHFDA, if your property is not assigned to a Contract Administrator then you will mail the form directly to your asset manager at HUD. This form MUST be sent to the appropriate agency within 10 days of the resident move-out.

VACATE REPORT (Form I-4)

After the move-out inspection is performed and the necessary work orders have been completed, the Community Manager will complete the vacate report. To make this process easier, we have entered formulas. If a cell is blue it means you need to fill in, if the cell is grey, it means there is a formula and as long as you answer the blue cells they will calculate automatically.

The purpose of the vacate report is determine how much of the Security Deposit the resident will be refunded and the costs involved in making the unit ready to reoccupy.

At the top of the vacate report, the Community Manager will fill in the basic tenancy information such as name of community, apartment number, resident name, move-in date, move-out date, date resident gave notice to vacate, length of residency, answering if resident lived in unit for 12 full months, if resident gave 30 day notice, if resident passed away, is move-out date 14 days from date of death, if resident is eligible for Security Deposit refund.

The next section relates to tenant charges/damages. Length of residency is essential when prorating damages to an apartment such as replacing carpet and repainting. Then, the Community Manager will complete the section titled Charges Made Against Security Deposit. The Community Manager will use the List of Charges (This list is property specific and must be posted at the property) for this section, e.g..-cleaning refrigerator, stove, blinds, etc.

If major (replacement cost items) damages are made the damage cost should be prorated based on the Useful life of the product, the time resident used product and the remaining useful life. The tenant portion amount on the work order would be entered on the resident damage section of the vacancy report and the balance is entered on the make ready portion. Other tenant damages are entered on the vacancy report by using the dollar amount and the work order number from the work order. The total of the damages on the vacancy report shall equal the total on the work orders.

After completing this, the Community Manager will complete the calculation of refund or amount due section. Please make sure you remember to enter the Security Deposit Interest, Rent Credit, any past due rents and any other charges or credits applicable on the bottom of the form.

The next section of the vacate report to be completed by the Community Manager will be Apartment Make Ready Information. The first line will be the date apartment given to maintenance for make ready (this should be the move out date), then fill in the date of the make ready inspection (this should be the date your maintenance person finished making the apartment ready for occupancy). The number of days until make ready inspection will automatically fill in. Under the subheading Cost of Make Ready, all work orders that were performed due to the move-out inspection (except the work orders done that only charged the resident, those will be listed in the Resident Damages Charges Section) will be itemized by the appropriate line. If it is an extensive make ready, use the space provided at the bottom of the page to itemize the different costs. The amount of time estimated to make the apartment ready should be added directly from all the work orders.

After completing this, the vacate report MUST be sent to the Accounting Specialist within 10 days after move-out:

The Accounting Specialist will review your documents for accuracy. If the documents are inaccurate they will be sent back to the Community Manager to correct. If the documents are accurate then the deposit accounting will be performed. The Accounting Specialist will set up any forfeitures of the Security Deposit not the Community Manager. If resident is due a refund, the Accounting Specialist will mail the check to the Community Manager for mailing to former resident along with Security Deposit Disposition letter. If the resident is not due a refund, then the Accounting Specialist will inform the Community Manager that the deposit accounting is completed so the Community Manager.

The following documents are mailed to the former resident:

• The Security Deposit Disposition Letter (Must equal the deposit accounting from the vacate report approved by the Accounting Specialist), this must be sent certified mail with return receipt within 30 days of the move-out date to the resident. (The mailing stub must be legibly stamped by the post office and a petty cash receipt must be obtained by Manager.) This must be done whether or not your tenant has a Security Deposit Refund. THIS IS SC LAW.

• Refund check (if applicable)

• Copy of the completed vacate report

• Copies of any work orders and invoices to support damage charges to the resident

Upon completion of all resident paperwork, these procedures are to be followed:

• Organize resident file using move-out checklist. Put a copy of the completed checklist on top of the documents and file on the right side of the resident file.

• Take the resident move-out file from the current resident file drawer and place it in the file drawer for move-out residents that need special claims completed.

• Update your Vacancy Claim Spreadsheet

THINGS TO KNOW AND DO IF TENANT PASSES AWAY

• When you are completing the move out 50059 you must enter the date of death on the 50059

• You must inform family that tenants belongings have to be out within 14 days from the date of death

• If the tenant/family does not move out within 14 days from date of death, then from the 15th day until the tenant’s keys are returned and unit is vacated you must charge full market rent for the unit.

• You must get proof of the date of death for the tenant file. The proof can be an obituary, documentation from internet, certification of death, something from funeral home indicating date of death and as a last resort a written statement from a family member regarding the date of death will be acceptable.

Then scan the completed move out to the Regulatory Compliance Coordinator (RCC) within seven days of the documents being signed.

REMINDER: Make sure that you have already put in the proper order. Also make sure you name the file and subject line properly before sending email. Move out files shall not be sent to RCC until after the Accounting Specialist has processed the deposit accounting.

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