As a landlord, you already know property damage can be inevitable, but what is considered normal wear and tear? More importantly, how do you differentiate between normal wear and tear and tenant-caused damage?
It's essential to clearly define what is considered normal wear and tear versus tenant-caused damage in your lease agreement. Communicating effectively with renters about their responsibilities to maintain your property can help avoid excessive damage and protect your investment. Doing so will also help determine who is liable to pay for certain damages–your tenants, or you.
This article will walk you through what constitutes normal wear and tear and how to distinguish it from atypical damage. With this knowledge, you'll be better equipped to protect your investment and avoid unnecessary tenant disputes.
Before differentiating normal wear and tear from tenant-caused damage, it helps to understand what represents normal wear and tear in a rental property.
Normal wear and tear is the natural degradation of your property due to aging and reasonable usage by tenants. This means that a tenant's ordinary daily activities should not be considered as damage to the property.
To help make the difference clearer, here are 10 common examples of normal wear and tear that landlords can expect in a rental property:
These are just a few examples, and what constitutes normal wear and tear may differ depending on your location and the type of rental property you own.
As a landlord, conducting regular inspections and maintenance is essential to ensure your rental property remains in good condition. If you notice any significant changes or damages that may require repair, it's vital to document them and communicate with your tenants to avoid any confusion or disputes later.
Tenant damage refers to any destruction caused by tenants, household members, guests or vandalism that is beyond the natural wear and tear of the property. This includes damages to the property, equipment, fixtures, appliances, landscaping, and furnishings.
Here are some examples of tenant-caused damage that landlords generally consider excessive:
Here are some suggested best practices for landlords to establish a clear definition of what is considered normal wear and tear versus tenant-caused damage in the lease agreement:
By following these best practices, you can clearly define the difference between normal wear and tear versus tenant-caused damage, set expectations for your tenants, and protect your investment. It's also helpful to seek legal counsel and familiarize yourself with state and local laws and regulations to ensure all your agreements and practices abide by them.
Whenever there is a repair or maintenance issue related to normal wear and tear or due to the landlord's neglect, the landlord is responsible for fixing it and covering the cost that comes with it. However, when a tenant causes damage, the tenant can be held accountable for these expenses.
Generally speaking, a tenant's security deposit can be used to pay for tenant-caused damages, typically as outlined in the lease agreement. But what happens when the cost of repairs exceeds the deposit amount?
As a first step, it may be beneficial to try to negotiate with the tenant and come up with a payment plan that is acceptable to both parties. You could also consider offering the tenant the option to perform minor repairs themselves in exchange for a reduction in the amount owed.
If you aren’t able to come to an agreement, you may have to take legal action to recover the remaining costs from the tenant. This can involve filing a lawsuit against the tenant or working with a collections agency to recover the debt. It's important to note that the laws regarding security deposits and tenant-caused damages can vary significantly from state to state.
Having a good landlord insurance policy is equally important when it comes to managing repair costs. The right insurance policy includes coverage that protects against unforeseen events such as natural disasters, tenant-caused damage, and other risks. To see how your current policy and rate compares, get a free quote from Obie.