As a landlord, you are responsible for paying for the normal wear and tear that will happen when renters are living on your property. However, the laws about what is wear and tear and what is excessive damage are vague at best. To help you understand how to navigate this tricky aspect of being a landlord, we’ve answered some of the most important questions about normal wear and tear.
Wear and Tear – What’s normal and what’s excessive
The law only loosely defines what is considered excessive damage and what is normal wear and tear. You should use your best judgement and exercise caution when in doubt. Never try to make your tenants pay for expected wear and tear that you don’t want to cover yourself. Examples of normal wear and tear include: small nail holes; small chips in the walls; faded paint or wallpaper as a result of time; thinning carpets; scuffed floors; sticky or warped doors caused by weather; lose (not broken) tiles; cracks in the building’s foundation because of settling; worn enamel in bathroom fixtures; worn varnish on plumbing fixtures; worn or broken appliances because of time; and any damage that occurs because of your own negligence.
Expected wear and tear are things that you can reasonably expect to replace or repair after each tenant moves out. On the other hand, excessive damages beyond normal wear and tear are generally things that you cannot expect to happen and/or do not happen naturally as time passes. Your tenants may cause excessive damage because of negligence, such as causing water damage by leaving windows open repeatedly in the rainy season. Tenants can also cause damage purposefully, such as punching holes in walls or completely repainting rooms a different color.
Examples of excessive damage include:
- Unauthorized paint jobs
- Gaping holes in walls
- Water damage as a result of tenant negligence
- Excessive markings on walls
- Chips in wood or tile floors
- Missing window fixtures
- Holes or stains in the carpet as a result of tenant negligence
- Doors or windows completely broken
- Mold as a result of tenant negligence
- Broken or missing bathroom or kitchen fixtures
- Broken appliances
- Damaged garbage disposals caused from putting non-disposable objects inside of it
What you can and can’t deduct
You should expect to pay for professional cleaning between every tenant and you cannot charge your tenants for these costs. If you must pay for cleaning beyond what is reasonably expected, you can charge the tenant for the difference in the cost. For example, if it appears like the tenant has never cleaned the apartment and has let mold and dirt accumulate, then you can charge them for the additional costs you incur fixing the problem. To help keep this problem from happening, you should give your tenants a cleaning checklist when they notify you that they intend to move out; this will make sure that your tenants know what is expected of them before they move out.
Another expected cost is steam cleaning the carpets in between tenants; this is a cost you should not deduct from the tenant’s security deposit because it is reasonably expected. However, if regular steam cleaning fails to remove any stains, smells, or other damages on the carpet, then you can charge the tenants the difference for the cost to replace it. If the carpet was already quite old and nearing the end of its life expectancy, you cannot charge your tenants the full price of replacement. If the carpets are brand new, however, you can rightfully deduct the entire replacement cost from the tenant’s security deposit. While you should require the tenants to pay for any excessive damage caused, you should not try to stick your tenant with the replacement costs of the carpets just because they’re old and you don’t want to pay for it.
Each dwelling will also likely require new paint ever three to five years and you should expect to do so without charging your tenants. For instance, if a tenant has lived in a unit for many years, you cannot charge them for the cost to repaint the dwelling. Likewise, if you have not repainted the unit for more than three years even when the tenants have changed multiple times, you cannot charge the most recent tenant for the expected fading. However, you can charge a tenant for replacement costs if they leave freshly painted walls extremely dirty upon move out. You are also allowed to deduct the cost to repaint the walls if the tenant painted them without your authorization.
You can reasonably expect your tenants to replace the dwelling’s lightbulbs as they burn out throughout the tenancy. Let the tenants know that you expect all lightbulbs to be working upon move out. If you do inform the tenant of this requirement and you find multiple lights burnt out, you can rightfully deduct the replacement costs from their security deposit.
Difference between damage and life expectancy
All products used on your property will have a set life expectancy that dictates when they will need to be replaced. You cannot reasonably expect items like carpet, paint, or window coverings to last beyond a reasonable time (usually three to five years). Most products will come with a useful life expectancy that the manufacturer has determined; make a note of these dates so that you are prepared to replace things as needed. As items age throughout the property, the replacement costs you can charge a tenant decrease. For example, if a tenant broke an eight-year-old refrigerator included in the unit, but its life expectancy is ten years, you can only charge the tenant for twenty percent of the cost to replace the appliance. The same goes for all other damage.
How to protect yourself
The most important thing you can do to legally protect yourself is to document everything. All evidence will be essential to protect yourself in court if a previous tenant contests any security deposit deductions. Take before and after photos and/or videos of your property to document the condition of the dwelling upon move in and move out; you can use these images as proof in a potential lawsuit.
You should also use a move in checklist with all new tenants and conduct a walk through that makes a written note of the condition of the property upon move in. Allow the new tenants the chance to inspect the property themselves before moving in so that they also have the opportunity to note any additional damages you may have missed and report them to you for proper documentation. If a new tenant reports additional damage, document this in writing as well.
You can also make it a condition in the rental agreement that tenants must immediately notify you if repairs or maintenance is needed in their dwelling. Inform your tenants upon move in that if they fail to report damages right away, they will be held financially responsible for the additional damages that may be caused from any issues being left unrepaired.
In addition to a move in checklist, you should provide your tenants with a move out checklist in advance of their move out date. This will ensure that your tenants understand what is expected of them and what they will be financially responsible for. A move out checklist will keep your tenants from claiming that they “didn’t know” they needed to vacuum their carpet or remove their personal possessions. This checklist should inform the tenant that they will receive their entire security deposit back if they leave the property in the proper condition.
Lastly, remember that you cannot deduct costs from your security deposit unless they have caused damages beyond expected wear and tear. If you do, a previous tenant may take you to court and win if you have wrongfully deducted money. As always be conscious of the law and document anything that can be used as evidence should you end up in court
How to deduct charges from a security deposit
First of all, and most importantly, do not forget to collect the security deposit from new tenants before they move in. Once they move in, you will have less leverage to collect it. You need this money just in case you find that the tenant has caused excessive damage upon move out.
In regard to returning your previous tenant’s deposit, state laws vary over the amount of time you have to return the security deposit and give them records of any deductions after a tenant move out. In general, most states require you to return the money and give the tenants the deduction information within 21 days after move out. Mail a check to the tenants along with an itemized list of deductions; a check will ensure that you have proof that you sent they money, which will be important should a previous tenant claim you never sent it. You should also have proof available of the actual quoted cost of repairs or replacements in order to back up your deductions.
Should repair or replacement costs exceed the amount of the security deposit, you can take the tenant to small claims court to try to get the additional money owed. This, however, will be a long and expensive process, so you should carefully consider if the benefits of a lawsuit outweigh the costs.