Renters caused damages higher than security deposit - Use insurance?

Question

My renters caused damages where fixing is about 10x the security deposit. How can I fund the fixes: Do I bill their insurance? Do I sue them and they bill their insurance? I've never had to deal with this situation so any advice is welcome. Thank you!

Theresa Harris · Answer

You document everything. Hopefully you have before and after photos from when they moved in and out.  Send them the bill for the damages and if they don't pay, then threaten to sue them. Even if you sue them and win, the chances of you seeing the money are slim to none.

Nathan Gesner · Answer

Theresa is right.

If they have insurance and it would qualify for a claim, they could file it to see what is covered and then you charge them for the rest. If that's not an option, you can try to file a claim with your insurance but they typically won't cover damages caused by a legal renter.

This is part of landlording. Turn the unit around. Document before/after with pictures and/or video and make sure you are thorough. Send the Tenant an itemized list of cleaning/repair charges and set a deadline for payment. Offer a payment plan if they ask.

If they refuse to pay, consider suing them. Get a judgment and see if they pay. If they still don't, send them to a collection agency. Expect that you'll never see a dime, but at least it will sit on their credit report for a long time and prevent them from qualifying for loans or taking advantage of other Landlords.

P.S. this much damage typically happens over a long period of time. Consider inspecting every 4-6 months to prevent situations from getting out of hand.

Account Closed · Answer

@Gil Nahmias That sucks.  I'm not sure what was going on for them that they let that slip...That had to be a huge distraction, huh?  What a headache.

A long time ago I knew a landlord that gave his tenants the option to have a part of their rent go towards savings that he would give them at years end if they agreed to have him inspect their place once a month, and fix anything that needed fixing right away.

So, he would set aside say, $100 per month of their rent if they would let him review the place each month.  At the end of the year they would get $1200.  It was often the only form of savings for his tenants.  And, he was able to maintain his places as he could quickly tend to any problems before they got too out of control.

I know it would not have helped in this overflow bathtub situation, but I've often wondered if it would work nowadays.

Thoughts?

Also, in an eviction situation, instead of go through the courts and draw it out, this same landlord would ask them how much money they needed to get off their feet.  I remember it was never all that much, considering.  He would agree to the amount they needed.  Then he would offer himself and his work truck to return to help them move out on the following Saturday.  They never refused.  That next Saturday he would show up with the cash and his truck and help them move out.  He helped them pack, move their furniture and delivered it all to their next place.

I was always surprised at how smoothly it went.  The place was never left clean, but it was always left quickly without melodrama.

Has anyone done this?

Julien J. · Answer

I agree with @Nathan Gesner

I've often found the ROI on litigation to be quite poor. You can burn up a lot of time and resources for little return.

John Clark · Answer

Do both: sue and claim vs renter’s insurer. You might even want to tell insurer you will add it to suit if it denies claim ( your lawyer makes that decision). Document all. Photos especially.

Renters caused damages higher than security deposit - Use insurance?

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