How to Handle Tenant Property Damage

Owning a rental property can be an exciting business opportunity, especially if you have responsible tenants who take good care of the home and pay their rent on time each month—but sometimes things don’t go as planned. You might find an amazing tenant, or you might end up with someone less than ideal. They may stop paying rent, refuse to communicate with you, or worse, cause significant damage to your rental.

To help you navigate the frustrating experience of property damage, we’ve compiled a few steps you can take. Please note that this is for informational purposes only and is not intended as legal or financial advice.

Tenant Damage vs. Normal Wear and Tear

Tenant damage goes beyond holes in the walls from hung pictures or worn carpets; these things are considered normal wear and tear that’s to be expected with any tenancy. In some cases, though, an angry or careless tenant might cause serious damage, like broken windows, large holes in the wall, or leaving large piles of trash around that cause staining, bad odors, mildew, or other unpleasant issues.

Assess the Damage

If the tenant has clearly caused property damage that goes beyond normal wear and tear, the first thing to do is to assess the damage and document it accurately. Take photos that are time-stamped; you might even want to consider taking video, as well. If, for example, there’s a large hole in the wall but the size of it isn’t clear in the photo, use a common object, like a quarter (or even a ruler) for reference.

Thorough documentation will provide valuable evidence if you need to take the issue to court. Hopefully, you took photos of the condition of the property before the tenant moved in—these can be used to prove the original condition of the rental. Next, you’ll need to get quotes from contractors for the repairs, which will help justify the costs you deduct from the tenant’s security deposit when the lease ends.

Know the Law

Although tenants are generally responsible for damages that go beyond normal wear and tear (regardless of whether it was intentional or caused by a guest), it’s important to know that state and local governments have different laws regarding rental damage. These may include specifics on who’s responsible for what and the steps landlords must take to collect money for damages that fall under the tenant’s responsibility. Before taking any action, make sure you’re clear on the laws that apply to your property.

Also, keep in mind that anything that falls under normal wear and tear isn’t the tenant’s responsibility. This includes things like worn carpet in high traffic areas, faded or peeling paint, loose grout, and worn enamel on bathtubs and sinks. On the other hand, chipped or burnt flooring, broken windows or locks, and pet stains or damage go beyond standard wear and tear and will usually be the tenant’s responsibility.

Handling Tenant Damage

How you should handle the next step can vary based on your state and local laws—as well as whether the tenant is still living at the property. Here’s a general overview of how to approach your tenant about the damage. Keep in mind that along with the damage, you should also document any attempts you make to discuss the damage with the tenant.

  • Talk to the tenant
    If the tenant has been a good tenant up until this point or the damage seems accidental, it’s worth talking with them to see if you can work something out. Bring along a copy of the signed lease or rental agreement as a reminder of what they agreed to when they moved in. Ideally, the tenant will accept responsibility and everything will go smoothly. Make sure to document whatever is agreed upon. If the tenant doesn’t accept responsibility or becomes uncooperative in any way, you’ll need to take more drastic measures.
  • File for eviction
    Breaking the lease or posing a significant threat to the property are both valid reasons to consider evicting the tenant. Although eviction is a time-consuming process, it may be the best option for uncooperative tenants. However, be aware that eviction could make the tenant vindictive—which could result in more property damage. If you choose to evict them, handle it calmly and professionally, and document every step you take.
  • Cash for keys
    If you’d prefer to avoid eviction, you also have the option of offering “cash for keys”. With cash for keys, you would offer the tenant a lump sum of money to leave the property. If you choose this scenario, you can also add on conditions—for example, the rental must be clean with no further damages. Cash for keys isn’t necessarily ideal, but it can be a quicker (and potentially less expensive) alternative to eviction.

What to Do if the Tenant Has Already Left or You Can’t Get Ahold of Them

If the tenant has already left your property, or they aren’t responding to your attempts to discuss the damage, consider taking the following steps:

  • Deduct the cost of repairs from the security deposit
    Once the tenant has left the property, get a quote for the cost of repairs and deduct them from the security deposit. Make sure to send the tenant an itemized list of what needs to be repaired.
  • Consider legal action
    If the cost of the damages exceeds the total amount of the security deposit, you’ll likely have to pay for the remaining costs yourself—or take the tenant to court. Before making a decision, you may want to discuss the best course of action with an attorney.
  • Consider filing an insurance claim
    Another option is to file an insurance claim. Depending on the circumstances, this may be the best option. Many insurance policies include tenant damage. Check with your insurance company if you’re not sure you have coverage.

What if the Financial Responsibility for Damage Isn’t Clear-Cut?

In most cases, it will be obvious who is responsible for the damages. However, some situations can confuse the matter. Take this story from the landlord’s sub-Reddit, for example. The landlord rented their former residence to a tenant; in the lease, it stated that the tenant was responsible for any damages they caused. The tenant later claimed that the outlets in the kitchen weren’t working, so they wanted the landlord to pay for the repair. The landlord, however, was pretty sure the outlets had been working when they handed the keys to the rental over to the tenant.

Although there’s not enough information to truly determine who’s responsible, this story highlights an interesting dilemma; unlike other types of damage that can be easily photographed and compared to earlier documentation, such as a burn on the carpet, there’s no easy way to prove who was at fault. The outlets may not have been working when the tenant moved in, or it’s possible the tenant overloaded them—or, it could be that a breaker needed to be reset. In this circumstance, some research would be needed to determine what caused the problem in the first place.

The best course of action would be to hire an electrician to look at the issue and go from there. Once it’s clear what caused the issue, you could determine whether it was due to something the tenant did and whether they should be billed for it. If the issue was due to old, faulty wiring, that’s not the tenant’s fault; it would be the landlord’s responsibility to fix.

Preventing Tenant Damage

There’s no way to completely eliminate tenant damage (or other issues that could arise), but there are three important steps you can take to significantly reduce the chances of it happening.

First, make sure you have a thorough tenant screening process in place that you use each time you consider an applicant. Next, you’ll want to create an iron-clad lease agreement that clearly outlines all the terms of the tenancy and your expectations of how the tenant should treat the property. Be sure to include details on what the tenant can expect if they violate the terms of the agreement. Finally, you should have a system for performing regular inspections at the rental. Whether you conduct the inspections yourself or hire someone to do it, regular inspections can help you spot minor issues before they have a chance to get worse. By taking these three steps, you can rest easier knowing your property has protection against bad tenants or large-scale damage.

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