Rental Repair Question

12 Replies

I have a SFR that I try to have inspected annually. During the last inspection, it was noted that one of the interior doors has been forced in and both the door and jam are beyond repair. I am intending to have the door replaced, however I have a question about how to charge it to the tenant. Can I tell them that it will be deducted from their deposit even though they still live there? If not, I'll simply send them a bill for the repair.

Thankfully this is actually the first major repair that I will have needed to bill for!

It depends on how your lease is worded. But in general I would inform them that they are responsible for the replacement of the door, and I would send them a bill with a note that payment is due within X days. If they refuse to pay, then you are certainly entitled to deduct the cost as damages from their security deposit. If your state laws and lease allow, I would also add a monthly late fee to the amount owed.

my response posted twice for some reason

Check your lease and see how it is worded, also follow your local hows on how to withhold security deposits.  Many large cities like Chicago have strict rules and are more favorable for tenants.  In the City of Chicago with some of my properties, we do away with security deposits and charge tenants a 1 month non-refundable admin fee.  

@Sunny Lamba  

There was an important Illinois Appelate Court ruling last year that clarified move-in/administrative fees.  Chicago landlords can charge up to 50% of the monthly rent and still call it a non-refundable fee.  Anything more than that would be ruled a deposit and fall under the RLTO for security deposits regardless of what you call it.  

Chicago landlords, DO NOT TAKE SECURITY DEPOSITS!  I was involved in a eviction case several years ago in which a defense attorney argued that since the judge did not agree with one of my damage claims deducted from a deposit, that it was a violation of the RLTO and should trigger the security deposit violation penalty.  The judge seemed open to the argument, and continued the case.  He later ruled in my favor, but reduced a 10k claim all the way down to 2k solely based on the tenant's testimony, even though I had photo proof.  Chicago judges are notoriously tenant friendly, and rule in the tenant's favor in all cases.

The latest legal hustle in Chicago are defense attorneys who are mailing postcards to defendants in eviction cases offering to represent them for free.  Then, they show up in court and demand the landlord pay the lawyer $500, give the tenant 45-60 days to move, and drop the money claim or they will file a countersuit trial demand with all kind of frivolous counter-claims, hoping to get one to stick.  They file all kinds of crazy discovery, which you have to produce.  It is pure hell.  You also have to pay your attorney for a trial.  

Be very, very careful with tenants in Chicago.  Memorize the RLTO.

@Johnathon Griggs  How have the tenants performed during the lease?  If they haven't given you any trouble and they plan on staying longer I wouldn't shake the tree.  Note it in your file, possibly send them a letter, but I probably wouldn't repair yet. A interior door installed and painted for me is around $200.


Frank

@Eric S.  Great information, yes you are correct.  My mistake on 1 month, it is 50 Percent, the buildings I sell are typically 2-units so I indirectly thought it was a total of  1 month with both units.  Thanks for the information and yes, RTLO is a tough cookie!  

There will, in all likelihood, be plenty of other things that will be deducted from their deposit. It depends on the wording of your lease of course, but I would charge them for it right now. 

Originally posted by @Johnathon Griggs :

I have a SFR that I try to have inspected annually. During the last inspection, it was noted that one of the interior doors has been forced in and both the door and jam are beyond repair. I am intending to have the door replaced, however I have a question about how to charge it to the tenant. Can I tell them that it will be deducted from their deposit even though they still live there? If not, I'll simply send them a bill for the repair.

Thankfully this is actually the first major repair that I will have needed to bill for!

 I see zero benefit to you to deduct it from a security deposit for someone who isn't moving out. You charged a security deposit for a reason, why would you want to reduce it? As a landlord you'd benefit from the security deposit increasing, certainly not decreasing. Just bill them for the repairs with a huge mark-up for your time dealing with it and of course that's after a long WTF??? moment with the tenants about damaging your property.

This is all good information, thank you all for chiming in! It's a particularly good point that there is no benefit to deducting the costs from the deposit at this point. My lease is very clear that this sort of damage is on them and that they're responsible for it. I could simply leave it as is for the time being, however like for my property to remain in good condition.

what does you lease say? I "do not" take things out of security deposit till after they move out! That is their only skin in the game for when they move out!

My lease let's me take out the repair first and than rent! As you can go after rent not for fees or repairs as easily in court!

My lease doesn't specifically state how I can exact repair costs, but rather simply that they are responsible for *all* repairs under $100 and *all* repairs that exceed that amount if they were obviously at fault for the damages. Specifically stated: "Any item of maintenance or repair exceeding this amount that is not caused by the misuse, neglect or waste of Tenant, Tenant’s family, employees, or visitors shall be performed by Landlord."

I wouldn't repair it until they move out, then take it out of the security deposit.  I would, however, make a note of it.  If they haven't complained to you about it, evidently it isn't bothering them.  

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here