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While renters aren’t responsible to pay for wear and tear, they should compensate for any other damage not related to the property’s everyday use. As the landlord, you can typically deduct for damage above normal wear and tear from the renters’ security deposit. However, to ensure no disagreements happen, you can encourage renters to report and document minor problems ahead of time.
Normal wear and tear is a property’s deterioration from normal, everyday use. It typically includes minor damage and any major damage that isn’t the renter’s fault. It does not include negligent, irresponsible or intentional actions that cause damage.
Normal wear and tear can include:
Tenant damage is any damage that doesn’t happen from normal, everyday use. This can include damage caused by direct actions from the tenant, guests or pets. It can also include worsening damage because the renter didn’t report a minor problem.
Examples of tenant damage:
Landlords typically can’t charge tenants for wear and tear to the property. However, the renter does pay for accidental or intentional damage beyond wear and tear.
In most cases, you can deduct the amount from the tenant’s security deposit after notifying them of the damage. However, many times disputes about whether the damage is considered wear and tear happen between renters and their landlord. For example, is a three-year-old carpet that needs to be replaced considered wear and tear or should tenants pay for it because they used it last?
You can check with your state laws for specific details about handling security deposits and charges for damage.
Tenant damage isn’t covered by landlord insurance policies, although a few stray cases may get coverage like damage from a leaking roof. In most cases, the renter will pay from their security deposit or renters insurance policy.
Landlord insurance also doesn’t cover wear and tear or damage from lack of cleanliness. However, some policies let you purchase mechanical breakdown coverage for mechanical issues with major appliances.
If your renters disagree that they should pay for damage, try following these guidelines:
A good rule of thumb is to document the dispute. Try to keep communication in writing or include multiple staff members in personal conversations when possible.
You can head off rental property damage by leasing to responsible renters and listening to their needs during the lease. Tips to keep in mind:
As a landlord, you face many risks when renting out your property, including property damage the renter may cause. However, you should expect some minor damage from everyday use of that property, which is considered normal wear and tear. Even if you lose money on wear-and-tear damage, you can offset other risks through a robust landlord insurance policy.
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