The function of a security deposit is to provide some assurance that a tenant will return a rental property to its original state (or pay for any necessary repairs). However, one common mistake will diminish the property owner's ability to apply deposit deductions.
Let's say that you have a verbal agreement with a tenant that, as landlord, you will repair a garbage disposal, clean the carpets and apply a fresh coat of paint to the bathroom. The soonest that these repairs can be made is one week after the desired move-in date. Upon occupying the unit, the tenant takes photos which highlight its current state of disrepair. You just lost the ability to collect full reimbursement for damages from the security deposit. When the lease expires the tenant has a justifiable reason to refuse deposit deductions, as they can fairly argue that they returned the unit to its original condition. You may very well have upheld your verbal agreement, and the tenant benefited from the repairs made to the unit, but under these circumstances a judge will rarely be swayed to demand reimbursement for damages.
Do not allow a new tenant to move-in to a rental unit until it is cleaned and repaired as needed. Conduct a walk-through with the tenant and itemize a move-in/move-out agreement. This agreement must contain language as required by the Warrant of Habitability Law and should be signed by both the landlord and tenant prior to move-in (and then again during the walk-through at move-out). Keep the agreement, and any photos of the unit, with the lease contract in a safe or locking filing cabinet.
RSI provides access to many such documents for rental property owners. To download a standard Move-In Move-Out agreement, select the following link: Tenant Move In Move Out Inspection