Every tenant puts some wear and tear on an apartment, but how do you know when damage is too much?
How can you protect yourself from significant expenses, and what should you do if a tenant damages your property? If there is water damage in the apartment, who is to blame? Can you sue your tenants? Here, we answer some of the biggest property owner questions and provide guides to knowing the difference between normal wear and tear vs. damage.
Your tenant of 8 years has just moved out. You grab your clipboard and keys, intent on inspecting the newly vacant unit in your property. As you open the door, you notice it sticks a little. The apartment is generally clean. The tile at the entryway is dirty but swept of debris. The kitchen appliances are old, the paint is chipping, and the sink is dripping slightly. The walls in the second bedroom are riddled with nail holes. The main bathroom’s toilet is running. The living room’s built-in bookcase is scratched, and the blinds have faded by the sun. One screen behind the window is ripped. The carpet has deep stains, including some that smell slightly of ammonia. As you stand in the empty apartment, your biggest question is this: What amount of the prior tenant’s security deposit can I use to make this unit rentable again?
Knowing the difference between normal wear and tear vs. property damage is a must as a property manager or landlord. Not knowing what can be charged to the prior tenant is a costly mistake in repair and labor costs and potential legal fees if the tenant refuses to pay or takes you to court to get their full security deposit back.
What is Normal Wear and Tear?
Caretaker, a property management site, defines normal wear and tear of residential space as “the gradual deterioration of a rental over time due to the impact of someone living there.” This single sentence definition is somewhat ambiguous. Luckily, there are state and federal guidelines to help you. The U.S. Department of Housing and Urban Development (HUD) put together a list of examples of ordinary wear and tear that landlords can use as a benchmark.
Examples of Normal Wear and Tear in an Apartment
You will usually need to have the rental unit professionally cleaned and make general repairs before renting to someone else. If the cleaning is excessive, you can use the prior renter’s security deposit. Still, you can’t use the security deposit to cover normal wear and tear (check your local state and federal guidelines, like Wisconsin’s Tenant/Landlord Guide).
HUD has decided that wear and tear is “the costs an owner incurs for the basic cleaning and repairing of such items necessary to make a unit ready for occupancy by the next tenant are part of the costs of doing business.”
HUD’s list of wear and tear examples include:
- Paint or wallpaper that is faded, chipped, cracking
- Warped wood from humidity (doors or windows that stick)
- Cracked window pane from faulty foundation or building issues
- Mild nail or pinholes
- Worn or faded carpet or linoleum
- Partially clogged sinks caused by older pipes
- Loose bathroom tiles and grouting
- Dull or scratched enamel in old bathtubs, sinks, or toilets
- Dirty or faded lamp or window shades
- Small plaster cracks or chips
- Rusty shower rod
Reasonable wear and tear will happen; rarely will renters leave their unit in a better condition than when they first signed the lease. Expect more wear and tear the longer a renter has lived there.
What is Property Damage?
What if a tenant goes too far and you suspect there are damages to the property? Most states have guidelines defining property damage and regulating your costs and compensation. It is essential to know Tenant/Landlord laws in your state before charging for damage. Generally, property damage includes anything that results in the loss of use or damages from abuse or neglect.
Examples of Property Damage
Although strict property damage definitions can vary from state to state, there are some generally accepted acts of destruction.
Water damage: who is responsible for water damage depends on the cause. The renter’s responsibility is the water damage that is not the direct result of poor maintenance or a prior underlying issue. Water stains and flooding as a result of tenant neglect are examples of water damage.
Missing items: Blinds, curtains, tiles, and window screens are all examples of things that, if missing, are considered property damage.
Accidental damage: any damages that don’t result from abuse, neglect, or malice but are over the standard wear and tear definitions. Examples include carpet burns or pet stains, wood gouges, broken windows, chipped enamel on the bath or kitchen fixtures, and broken mirrors. Accidental damage caused by pets includes flea, pest, or rodent extermination if you can prove the tenant’s negligence caused the infestation.
Misuse: This term applies primarily to damage created through abuse, neglect, or malice. Vandalism can include broken and missing items such as those listed above but can also include large holes in walls, excessive nail holes, damaged doors, and even unapproved paint color. Misuse that results in broken appliances or clogged drains is also the tenant’s responsibility.
How To Avoid Costly Property Damage
There is no way to ensure total protection from property damages. You will definitely deal with property wear and tear, and it is inevitable that someday you will have to deal with property damage. The best way to mitigate the potential expenses is by following these tips:
Tip 1: Routine Maintenance
The landlord’s legal obligation is to keep the rental unit and the building in good working order and livable. The best way to keep your property attractive to tenants, and keep your costs down, is to schedule routine maintenance. Addressing building issues or tenant maintenance requests right away is an investment that keeps problems from getting more extensive and more expensive.
Landlord maintenance rules vary by state, but in general, you are responsible for:
- Providing trash receptacles
- Keeping common areas clean
- Ensuring vital systems are working
- Building repairs that are not the tenant’s responsibility
- Staying up to code
- Keeping units livable
Keep in mind that tenants have rights too. For example, tenants need to be notified of services that will be turned off for repair or if you intend on entering their rental unit for maintenance.
Tip 2: Check Your Paperwork
You already know how important a lease is, but did you know that this binding contract can also address normal wear and tear and property damage before any damage happens? A good lease will detail the amounts of a security deposit, pet deposit, and cleaning deposit. The lease will ask for an acknowledgment from the renter that the unit is livable, to list any current damages or problems, and explain the tenant’s responsibilities regarding maintenance and damages. Consult with a lawyer to make sure everything in the lease is legal in your state.
Always do walkthroughs. Inspect the empty unit and note any current wear and tear or any damages. If there are repairs that need to be done, do them. Take photographs and date them, so there are no questions of accuracy. Then, if the tenant vacates the rental, walk through again with the initial paperwork and note any changes with written descriptions, dates, and photographs. Use move-in move-out rental inspection checklist templates to help you remember what to look for, and have your tenant sign and date it as well. If a tenant tries to sue a landlord for a security deposit return, having a lease that clearly states the rental policies will benefit you with resident signatures and itemized lists detailing problems. If you plan to withhold money from the security deposit for damages, you are required by law to have a detailed list of damages and costs to repair.
Tip 3: Get Good Tenants
Good tenants don’t trash their homes. They are stable, pay on time, are easy to talk to, and take care of your rental property. Good tenants will point out repairs when needed, which saves you money and time in the long run. In turn, good tenants make you a better landlord, one that communicates better and has an amicable relationship with the people renting your property.
There are several ways to attract good tenants and ways to screen for them. Things to look for in a tenant are a decent credit score, a clean background check, and a strong credit history. Red flags may include bankruptcies and a criminal record. While you may set some of your good tenant wishlists, remember you need to abide by state and federal laws that prohibit discrimination and provide for fair housing practices.
What Do I Do If My Tenant Damages Property
You’ve done a walkthrough with a rental inspection checklist, have documented extensive filth, and your exiting tenant has signed it. Or you have entered the rental unit with the tenant’s permission to make a repair and see significant holes in the wall. No matter the specific incident, you know that your tenant has gone too far and caused substantial destruction because you understand the difference between normal wear and tear vs. property damage. What now?
Many property management resource websites, such as Apartments.com and Roofstock.com, suggest these actions:
- Document the damages, especially with photos
- Get several estimates for repairs
- Deduct repairs from the security deposit legally
- Know your landlord rights
- Call the police if it is warranted
- Call a lawyer if needed, or take legal action against the tenant
- Talk with the tenant(s)
If you are lucky, your tenant will acknowledge their part in destroying property and cooperate with the policies you’ve laid out in the lease and the applicable laws. However, you may have to talk to an uncooperative or unresponsive tenant. Aggressive tenants who pose a threat to you, your other tenants, or your property must be dealt with immediately. Call the police if needed. Take all your documentation to small claims court against your tenant if you decide to sue or take legal action. If they are unsafe or continue to damage your rentals, consider eviction.
Whether you rent apartments, houses, or even a room or two, keeping your rental properties in good condition is the first step to a successful real estate venture. You will attract tenants, which means fewer vacancies and more income. Knowing the difference between wear and tear vs. property damages will save you a lot of trouble, time, and money. Establish a routine maintenance plan, create rental inspection checklists, and a lease addressing property damage policies. All of this will help you avoid major expenses and keep both landlord and tenant in a better situation.
