All Forum Posts by: James Hocker

Hi All,

How much should I charge a tenant who damaged a property in ways that I can probably never repair?  

A tenant recently moved out of one of my properties after about 3 years.  They gave 30 days notice, and made an effort to have the place fairly clean the day they moved out.

I've returned the entire deposit in the past to other tenants when they leave a place in great condition.  Generally, I am generous to tenants when calculating the deductions to their deposit. 

In this case, the house was almost completely empty and fairly clean.  Unfortunately, the tenant caused water damage to the hardwood floor in the kitchen.  They also left a large oil stain in the driveway.  It significantly detracts from the curb appeal of the house.

The tenant has already tried using various methods to remove the oil stain, but it's still very unattractive.  I find it especially frustrating because I believe the stain was caused slowly over time by an oil leak the tenant must have seen developing.  There is plenty of street parking right next to the driveway, and a garage, and if the tenant had simply used either of those (or fixed the oil leak) it wouldn't make the house and neighborhood so ugly.

The house was in near pristine condition when they moved in.  I have photos and videos before and after the tenant's occupancy, and the tenant did not deny causing the damage when we did a walk thru.  (Although he may if presented a bill, he's denied causing damage in the past that he was clearly responsible for).

I can probably rent the house out again without fixing the driveway or flooring.  Since I'm not out of pocket, but the value of the house has been significantly decreased, I'm not exactly clear on how much I should charge the tenant.

Your thoughts would be appreciated.  The house is in California.

Looking forward to it.

3 other options: evict, per diem, or shuffle

Evict:  Depending on the length of their rental agreement and any rent-control ordinances in place for your area, you may also want to consider terminating the tenancy, then doing the work with vacant units.

Of course it's usually not a great idea to evict tenants that are paying their rent!  ...but if the fair market rent of the units will be much higher after you've updated them, it might make sense.  

Per diem:  You might consider offering them cash to take a vacation or stay with someone else.  Offer them a daily cash amount that's lower than what it would cost to put them into a hotel.  It could be a win-win for you and your tenant.

I would consider paying per diems or hotels very high risk.  Any delay by your contractor would mean you're stuck paying fees longer, while simultaneously losing cash flow on an unoccupied unit.

Shuffle:  Since you've got one unit that will be unoccupied until you move in, would it make sense to move the tenant from their unit to yours until work is completed on theirs? 

If you're doing something like tile flooring, it will take at least a few days per unit, and remember that any time you rip something out of a house, you may discover a problem that needs more time to fix than you anticipated!

Good luck!