Finding Text
Finding Number 2024-6
Condition: Cathedral Towers did not ensure that appropriate documentation of the timely repayment of tenant security deposit refunds upon vacating the unit was retained in three tenant files.
Criteria: Per HUD Handbook 4350.3, the project owner must provide the tenant with a refund of the security deposit or an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair within 30 days after the move-out date.
Cause: Tenant security deposits are generally remitted timely following the move-out date and tenant files for vacated units typically contain evidence of the refund amount and documentation of any deductions charged against the security deposit. For two vacated units, there was no evidence of a security deposit refund retained in the tenant file. For another vacated unit, the refund was not remitted to the tenant within 30 days.
Effect: One security deposit was not timely remitted following the move-out date. Two additional tenant files did not contain adequate documentation to determine whether the security deposit refund was remitted timely.
Amount in Questioned Cost: $0
Recommendation: Cathedral Towers should review the procedures in place to ensure security deposits are refunded timely and evidence of the refunds is appropriately documented upon the unit being vacated by the tenant.
Auditee’s Response: Cathedral Towers agreed with the finding and will review the move out inspection process to ensure the security deposit refunds are made timely and documented appropriately.