What Happens If the Charges to the Tenant’s Security Deposit Exceed the Amount of the Security Deposit?

Audience: rental property owners who want to understand what happens when tenant-caused damage, unpaid rent, or cleaning costs exceed the amount held in the tenant’s security deposit, and how MoveZen pursues additional recovery.

Security deposits are designed to cover some, but not always all, tenant responsibilities. When charges exceed the deposit balance, owners often worry they’ll be stuck covering the difference themselves.

Here’s how it works.

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FAQs ❓

Does the tenant still owe money if charges exceed the deposit?
Yes they remain responsible for the full amount legally assessed.

Does MoveZen automatically pursue the tenant for the remaining balance?
Yes. Outstanding charges are collected and, if unpaid, passed to collections.

Does the owner need to take action?
No. MoveZen handles the entire process.

Can tenants dispute charges that exceed the deposit?
They may, but MoveZen provides documentation that supports lawful recovery.

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Step 1: MoveZen Calculates Total Charges ✔️

After move-out, we itemize:

• Cleaning

• Repairs

• Damage beyond normal wear

• Painting or flooring (when chargeable)

• Missing items

• Unpaid fees or utilities

• Unpaid rent

• Pest treatment (if due to tenant behavior)

• Lease violation charges

Depreciation is applied where required by law.

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Step 2: The Deposit Is Applied to the Total Balance 🔐

The security deposit is used to:

• Cover allowable charges

• Reduce the tenant’s outstanding balance

If charges exceed the deposit, the remaining amount becomes a tenant debt.

Example:

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Step 3: MoveZen Issues the Legally Required Accounting 🧾

Within 30 days, or 60 days if additional time is needed for final vendor invoices, MoveZen sends:

• An itemized accounting

• Supporting documentation

• Photographs

• Remaining balance owed

This is required under NC landlord-tenant law.

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Step 4: MoveZen Pursues the Remaining Balance From the Tenant 💼

If the tenant does not pay after receiving the final accounting:

✔ Step 4a: Internal Collections Attempt

MoveZen attempts to:

• Notify the tenant

• Offer payment options

• Remind them of their legal obligation

If unsuccessful…

✔ Step 4b: The Account Is Sent to a Professional Collections Agency

MoveZen partners with established agencies such as Hunter Warfield (or comparable providers) who:

• Report debts to credit bureaus

• Attempt recovery through calls and notices

• Provide legal recourse when appropriate

This maximizes the chance of owner recovery.

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Step 5: If Needed, Suit Authorization May Be Requested ⚖️

For significant balances, the collections agency may recommend a civil suit.

Key points:

• MoveZen will request your authorization before filing

• The agency handles all legal filings

• Court and attorney fees may be added to the debt

• Judgments increase the likelihood of recovery over time

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What If the Tenant Still Doesn’t Pay? 😬

Not all collections produce immediate recovery — but even when a tenant cannot or will not pay:

✔ Debts may remain on their credit history

✔ Judgments can be enforceable for several years

✔ Future wage garnishment or repayment arrangements may occur

✔ Many tenants eventually settle debts to qualify for new housing

This strengthens long-term recovery likelihood.

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What Owners Need to Know ✔️

✔ You are not required to contact the tenant

✔ You do not need to file legal paperwork

✔ You are not responsible for collection attempts

✔ MoveZen handles everything on your behalf

✔ You receive updates as available

MoveZen ensures the balance is pursued fully and legally.

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What Charges Commonly Cause Balances to Exceed the Deposit?

• Pet urine damage + carpet replacement

• Excessive filth or abandoned items

• Full repaint due to unapproved colors

• Flooring damage

• Large drywall repairs

• Appliance damage

• Rent delinquency

• Lease break penalties

• Pest infestations caused by tenant behavior

These can quickly exceed a traditional 1–2 month security deposit.

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What Cannot Be Charged (Even If You Want To) ❗

NC law prohibits charging for:

• Ordinary wear and tear

• Fully depreciated items

• Required upgrades

• Aging fixtures or flooring

• Cosmetic updates

• Normal cleaning after several years of tenancy

MoveZen ensures only legal charges are included in the balance.