Who gets the security deposit when the tenants divorce?

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11/14/2014 | Author: Editorial Staff

The tenants in a property I manage are a couple whose names are both on the lease. This week, they each told me that they are divorcing and gave me the required written notice to terminate their lease when it expires next month. They also both asked for the security deposit to be refunded directly to them. Who should I make the check out to if both of their names are on the lease?

Paragraph 10C of the TAR Residential Lease (TAR 2001) provides that any refund of the security deposit will be made payable to all tenants named in the lease. Since both tenants are named as parties to the lease, make the check payable to both of them.

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Categories: Legal, Landlords, Renters
Tags: renters, landlord, property management, residential lease, leasing, legal, legal faq


Rick DeVoss on 11/20/2014

It would seem that this answer has over-simplified things.
Today’s leases require that ALL adults put their names on the lease.  So what if there are 3 or 4 adults with names on the lease…?  Who gets the refund then?  What if the two tenants were not married?  What if there are 3 roommates?
I don’t think this answer really addresses the issue correctly, ...but I’m not an attorney.

Why not just refund the deposit to the person who actually paid it in the first place?

Then if it’s a joint account, you could make it out to both parties.
I will agree that forged signatures are not our responsibility, as long as we were not there when the fraud took place…

Jeanne Butterfield on 11/20/2014

Make sure to make check payable to “John Doe AND Mary Doe”. If you put “OR” in place of “AND”, the bank will only require one signature.

Blaine on 11/14/2014

In regards to them forging the signature there is no liability; you cannot be held responsible for things outside your control.*

*i’m not a lawyer but I play one on comments threads.

Blaine on 11/14/2014

Whereever paragraph 32 says things should go. If it’s the address they were renting then I would go off the address given in the first notice. Both names are on the check so both would need to sign it anyway and that’s between them.

Greg Foster on 11/14/2014

Regarding the security deposit to a lease being refunded to both names on the lease in the midst of a pending divorce, who then would it be delivered to?  One or the other may most likely endorse the other’s signature and deposit in their individual account. Could that present liability headaches for the brokerage or agent?

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