How Unclaimed Security Deposit Refunds Impact Property Management
These funds don't just disappear—they come with legal and financial risks that can haunt you for years.
Managing security deposits is a critical part of running a multifamily housing operation. But what happens when residents move out and forget to claim their security deposit refund? Whether due to an outdated address, lost paperwork, or general oversight, unclaimed security deposit refunds can pile up fast. These unclaimed funds don’t just disappear—they come with legal and financial risks that can haunt property management companies for years.
Let’s dig into what happens with unclaimed property, why it’s a bigger deal than you might think, and how property managers can take action to avoid trouble down the line.
What is unclaimed property?
Unclaimed property refers to assets or funds held by a business that haven’t been claimed by their rightful owner. This can include anything from a forgotten bank account to uncashed payroll checks. In the world of multifamily housing, unclaimed property most often takes the form of unclaimed security deposit refunds. These refunds eventually become subject to state escheatment laws, meaning they must be turned over to the state government if left unclaimed.
