How to Be Reasonable As a Landlord With Apartment Wear and Tear and Security Deposits
How do you go about determining what damage a tenant was responsible for after they move out?
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There is always damage — that’s not a question. But it can be surprisingly difficult to determine, for example, whether water damage to a windowsill was caused by a spill that was left untended or by natural condensation that gathered on the window, fell, and dried up all while the tenant was sleeping.
Here’s what’s NOT reasonable: it’s not reasonable to charge the tenants for absolutely everything that might have been their fault. But it’s also far from reasonable to absorb 100% of the repair expenses yourself — that just leads to you feeling powerless and abused.
The Ideal Situation
The ideal situation makes the process fairly painless: before a tenant moves in, you take a camera, a video recorder, a floor plan on paper, and a pen, and you explore the house thoroughly.
Take notes on absolutely everything that isn’t exactly what you would want to see in a perfect rental home. Then, take pictures of it all. Then, take video of it all. Then scan in those papers and save the digital versions of everything in a secure location, with a secure backup.
Take note of:
- Paint quality
- Damage to walls, floors, and ceiling
- Window treatments
- Window and door frames
- What appliances come with the property and their condition
- Any and all pre-existing damaged spots
- Stains in the carpet
- And basically everything.
Take excellent notes, too: don’t just write “stain on carpet.” Write “Stain on carpet, NW corner bedroom, approx. 5′ across, splatter, red, probably wine. Won’t come up with steam cleaning or scrubbing.” Don’t just write “hole in bathroom wall,” write “fist-sized hole in bathroom wall opposite mirror behind freestanding shelf.”
Then, when the tenant moves out, you do the same thing all over again, using exactly the same process. Take all the same kinds of notes, just as detailed, with pictures and video. That will give you an excellent comparison between the move-in and move-out conditions, which you can use to estimate repair costs.
Wear and Tear
Now, a goodly portion of those repair costs fall under the umbrella of “normal wear and tear,” and a good rule for wear and tear is to compare how long you’d expect an item to last in your house vs. how long it’s been in this house.(NOT how long the tenant was there — how long the ITEM was there.)
For example, the life expectancy of a dishwasher is about 10 years. If the dishwasher was 9 years old when the tenant moved in and the tenant was there for 32 months, you can expect to replace the dishwasher — and you can’t expect to charge the tenant, no matter what the dishwasher looks like when they leave.
For walls and ceilings, the informal standard is pretty well-set: if it takes more than a coat of paint to eliminate the problem, it’s gone beyond wear and tear.
For window treatments, fading is wear and tear; tearing, burn marks, or broken machinery are not. (That said! If you’re going to replace them because they’re faded, you can’t legitimately charge them for the wear and tear because it was already a cost you were going to bear.) While it’s made for a single county’s use, a pretty excellent guide is available here.
The Worst-Case Scenario
The worst-case scenario, at least in terms of determining cleaning charges, is that you inherit or otherwise acquire a rental property with a tenant living in it and have no records whatsoever of what the property looked like before they moved in.
Unfortunately, there’s no great way to handle this situation. To limit your exposure though, you should get into the property ASAP and follow the recording process outlined here to document the condition as of dd/mm/yyyy. While doing so remember that you’re not entirely responsible for any damages — and neither are they.
Probably the best way to deal with the situation upon their eventual move-out is to figure out the absolute minimum that it’ll cost to get the place ready for the next tenant, subtract any of those costs that are incurred by normal wear and tear, and then charge the tenant 1/3rd of that amount. Then, start the above-mentioned recording process promptly and be ready to never have to deal with that situation again.
Have you ever had an worst-cast scenario experience? Can you share how you handled repairs?
Be sure to leave your comments below!