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My landlord won't return my security deposit: What's my recourse?

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Q. My ex-landlord has my security deposit and hasn't returned my numerous phone calls and emails. How do I get it back? Will my renter's insurance cover it? Should I go to court?

A. Your best bet is to create a paper trail, both with email and snail mail, and to keep logs of any phone conversations you have with your ex-landlord, our experts say.

“Write a letter referencing the provisions of the lease which relate to security deposit and send it by regular mail and return receipt requested,” suggests Roberta Axelrod, a real estate broker and asset manager at Time Equities. “This will get the landlord’s attention as it will be a polite way of making it clear that you are laying the groundwork for legal action.”

In the letter, set a deadline, and note that if the money isn’t returned by that date, you’re ready to go to court, advises real estate attorney Dean Roberts of Norris, McLaughlin & Marcus.

The next step is to back up your threat. “Assuming the security deposit is less than $5,000 the former tenant can proceed in Small Claims Court,” Roberts says.

Of course, depending on the size of your deposit, the cost of a lawsuit may not be worth it, notes real estate broker Gordon Roberts of Warburg Realty. Even if you don't pay lawyer's fees in Small Claims Court, there's also the time and effort you’ll expend if there are multiple court appearances involved.

“Even if you win, you may have to spend even more money trying to collect,” Warburg's Roberts adds. “Given those circumstances, a cynical landlord may be wagering that you’ll simply move on and give up the refund without a struggle.”

There’s one more option: if you’ve been out of the apartment for more than 30 days, you could file a complaint with the consumer frauds and protection bureau of the Attorney General’s office, or call their consumer hotline, suggests Warburg’s Roberts.

Last, don’t count on your renter’s insurance to cover this, since your problem here is a contract dispute with your landlord, not damage from an unexpected event, experts say.

One potential loophole? “If the landlord is withholding the funds because of damage to the apartment, you might have a claim against your policy for the damage alleged,” says apartment insurance broker Jeff Schneider of Gotham Brokerage, “but the insurance company would still not pursue your landlord for the deposit.”

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