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mold from leaky tub in rental property

Our tenants informed us a week ago of a leaky tub that cause a water mark on the ceiling in the room below. We immediately got a plumber out who cut water damaged ceiling, fixed leak. Tenants are now demanding their full deposit back so they can move. They have extensive damage, outstanding water bill (which we will have to pay). I'm giving them a 30 day notice to vacate since we're on a month to month lease. Are they entitled to anything?
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I would get a profesional to write up on your bill or letterhead that an inspection has been done in regards to the damage from the tub and the mentioned issue has been fixed/corrected 100%. I would also make sure that the rest of the home/area involved in the damage, has no residual mold issues, as that can cause a MAJOR headache down the road with tenants. once that is all clear... No, they are not entilted to get their entire deposit back if you have proven damage left in the home, that was not pre-exisiting or there at their move-in. You need to make sure that your lease stipulates that the home/unit must be returned in the same or better condition in which it was turned over to them in. If there is damage, regardless of a leaky tub, it's on them and deducted from the security deposit. Make sure to take a LOT of pictures of the damage and do a very through move-out write up/evaluation. If you are taken to court over it, it will save you! Make sure there are no state specific issues involved in major leaks/structure damages too. I am from CA, so I am not sure about your state specific regulations/law.
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