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Tenants should put a security deposit beneficiary on lease

Posted: Updated:
SCOTTSDALE, AZ (CBS5) -

A Scottsdale man says he can't get his wife's security deposit back because she broke the lease by dying. Can a landlord keep the money for such a reason?

When a tenant passes away, the legal obligations of the landlord, regarding the security deposit, are not addressed in Arizona law. Even if the landlord agrees to return the deposit, next-of-kin should not expect to get the money right away.

"I guess it's a death penalty that nobody knows about," Harvey Staker said.

Her personal belongings are all Staker has left of Rosanne - his wife of 45 years. Staker says the couple separated two years ago but remained married and very close. After Rosanne suffered a heart attack, Staker says he went to her apartment to check on the recovery.

"I found her laying in bed, cold, gone, just like that," Staker said.

The apartment was at Tradition at Kierland in Scottsdale. Staker retrieved Rosanne's belongings and says he left the unit immaculate before asking for his wife's $550 security deposit.

"The owners refused to give me her security back. He did not give a reason why. I guess it was because she broke the lease by dying. How greedy can you be? What's wrong with you people? Don't you have a heart?" Staker said.

This action is legal. Landlords can, if they choose, keep a security deposit when a tenant breaks their lease because of death. They can also choose to refund it, but Sharron Sauls, a City of Phoenix Landlord/Tenant counselor, says landlords are not obligated to just hand it over to the next-of-kin.

"Because the landlord and the tenant had a contract between themselves, not with that third party being the husband," Sauls said.

Landlords can choose to issue refundable deposits to the estate of the deceased tenant, and next-of-kin like Staker would have to go through probate court to get the money.

"This is just another smack in the head," Staker said.

Tenants can easily avoid putting their loved ones in this sticky situation by simply naming a beneficiary in the lease.

"Write it in, make sure it's all signed, sealed and done. This way, they don't have a lame excuse to grab your money," Staker said.

The clause should instruct the landlord to pay refundable deposits to the beneficiary listed on the lease.

Most leases will stipulate that your obligations don't end upon death.  One such clause was in Rosanne Staker's lease, so tenants should also try to negotiate wording that says the lease terminates upon death with no penalty.

After I contacted Tradition at Kierland, management issued the following statement:

"We want to express our condolences to the Staker family for their loss. The provision of the lease in question is part of the standard National Apartment Association lease that is used throughout the country. In this instance, the security deposit ($550) will be refunded to the estate once we receive the necessary information concerning probate. Thank you for bringing this issue to our attention."

CBS 5 would like to thank Tradition at Kierland for making an exception in this case.

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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