When move-out day comes, many landlords are faced with the all-too-common problem of property damage. From dirty carpets to broken windows, property damage comes in many forms that will shock even the most experienced property owners.
Finding damaged property can be frustrating, however, it may not always be the tenant’s fault. In this article, we will go over the difference between wear and tear and tenant-related damage.
What is Useful Life?
Most first-time landlords tend to make the mistake of holding tenants accountable for the repairs of items that have exceeded their useful life. But what is “useful life”, exactly?
Useful life refers to the amount of time in which an item is considered usable. Every object in every rental home has a certain useful life expectancy. Appliances, electronics, furniture, and so on, eventually experience wear and tear. The wear and tear in rental properties may even be more extensive considering the number of residents coming and going over the years.
What is Normal Wear and Tear?
Normal wear and tear is a term that property owners and property managers use to describe items that have naturally depreciated simply because of use. For example, tables are expected to have small scratches after months of usage. Similarly, carpets are expected to fade and look slightly drab after years of tenant occupancy.
Some states provide a formal definition of “normal wear and tear”. For instance, in Texas, normal wear and tear is defined as the “deterioration that results from the intended use.” it doesn’t include visible deterioration caused by carelessness, accidents, or abuse of the property.
Here are some examples of normal wear and tear that you’ll probably see at your property during your next inspection:
- Smudges on the walls
- Faded or peeling wallpaper
- Scrapes and scratches on the table
- Sticking drawers
- …and many more.
How is Normal Wear and Tear Different From Damage?
Normal wear and tear is what happens when your tenants use an item for its intended use repeatedly over the years. On the other hand, damage is caused by negligence, carelessness, neglect, abuse, and accident.
As a property owner, it’s your responsibility to learn the difference between the two, as you can only deduct the costs of repairs from your tenant’s security deposit if the item is damaged. You cannot put the obligation on the tenant for normal wear and tear.
To illustrate, here are examples of normal wear and tear compared with damage.
- Normal Wear and Tear: visible fading, dull appearance, a handful of patches but no stains
- Damage: frayed edges (due to pet chewing), visible stains, holes, and rips
- Normal Wear and Tear: fading due to sunlight exposure, barely visible scratches
- Damage: deep scratches, missing hardwood pieces
- Normal Wear and Tear: smudges, small cracks, and nicks
- Damage: holes from nails, large holes, large cracks
- Normal Wear and Tear: dirt and dust build-up, faded or peeling window treatments
- Damage: missing pieces of the window, broken glass
- Normal Wear and Tear: light scratches, watermarks
- Damage: chipped edges, burnt surfaces, deep stains
- Normal Wear and Tear: mold due to poor ventilation
- Damage: mold due to failure to clean the rental home
A property management company can help you determine the difference between normal wear and tear and damage. Keep in mind that in either scenario, you will have to properly document each item with photos, videos, and reports.
How Should You Document Wear and Tear?
Proper documentation of wear and tear includes conducting several inspections throughout the tenant’s occupancy. This will help you identify which expenses should be covered by the tenant. Here are three ways to document wear and tear in your rental property:
#1 Conduct Move-in Inspections
Go through the entire property with the tenant and your property managers. Document each room’s condition with photos, videos, etc. Don’t forget to include outdoor areas such as patios, storage sheds, and pools.
#2 Conduct Regular Inspections
Conducting regular property inspections allows you to keep track of the property’s condition, as well as identify problems that need to be addressed immediately. It also shows your tenant that you genuinely care about the property, encouraging them to do so as well.
#3 Conduct Move-out Inspections
When the tenant’s lease is up, you must conduct a move-out inspection. Go through each room and note damages and wear and tear. Refer to your previous inspection notes to help you compare its current state with its original state.
Can You Deduct the Expense for Repairs from a Security Deposit?
It is advisable to collect a security deposit from your tenant at the beginning of their lease. The security deposit protects you, the landlord, from covering the expenses for damages. By law, landlords are permitted to deduct certain expenses for repairs from the tenant’s security deposit.
If the security deposit isn’t enough to cover all of the expenses, landlords can take the tenant to court. This, however, can be expensive and time-consuming.
What Steps Can You Take to Protect Your Investment?
One common cause for disputes between tenants and landlords is property damage. To protect your investment, you should clearly include the tenant’s obligation to pay for tenant-related damage in the lease agreement. This allows the tenant to be aware of their responsibilities in taking care of the property, as well as the consequences for their failure to comply with the terms.
Also, landlords should be vigilant during property inspections. If you haven’t hired a property management firm in Florida, you should consider doing as such. Property managers conduct annual inspections of the property to assess the condition of appliances, furniture, etc. as well as tenant-related damages.
Another step you can take to prevent tenant-related damage is by choosing the right tenants. Good tenants will respect and care for your property as if it were their own. To make sure that you lease your property to the most qualified tenants, use a tenant screening service to narrow down your choices
Hire a property management firm such as Luxury Property Care to help manage your rental properties for you. We have a team of trained property managers who perform routine inspections of the property, making sure that everything is meticulously examined and documented.