As a landlord, you are responsible for maintaining your rental unit and tending to major repairs, which are normal when you have multiple tenants over the years. But there is a fine line between unreasonable damage to your property because of misuse and regular wear and tear caused by environmental changes.
Why is this distinction important? It all comes down to the security deposit.
Landlords can use a portion of the security deposit to pay for damages caused by their tenants. However, landlords are not allowed to deduct the security deposit for regular wear and tear or the normal depreciation of property.
Defining Wear and Tear
All rental units will suffer some degree of deterioration, even if the tenants do their best to prevent damage. According to Hawkeye Management this type of wear and tear would have occurred with or without the tenant occupying the property. Even the most durable materials will degrade over time and need to be replaced. Moreover, things like the kitchen faucet will break down due to regular usage – you cannot fault that.
You will notice more cases of wear and tear the longer a renter occupies a unit. Wear and tear occurs due to natural changes in the property and not due to the tenant being reckless. It would be unfair to hold the tenant responsible for changes they didn’t cause.
Examples of Natural Wear and Tear
It’s not always straightforward to know what constitutes wear and tear. Below is a list of common types of wear and tear seen in rental units.
Door warping
Carpet ripples
Holes in the wall due to doorknobs
Broken strings in a curtain
Sun faded blinds
Loose or rocking toilet
Does Wear and Tear Impact the Security Deposit
Regular wear and tear should not affect the amount of security deposit refunded to the tenant. These materials are not being damaged because of the tenant’s mistake. They simply have a limited lifetime.
For this reason, it is not appropriate to deduct any amount from the security deposit to pay for the cost of repairing normal wear and tear. A better idea would be to incorporate the expected cost of wear and tear into your overall rent so it doesn’t detract from the profits. Your property manager would know a better basis for the amount of rent you should charge to cover regular wear and tear.
Defining Damage
Damage to a rental unit occurs due to abuse, neglect, and even accidents. This also applies to any alterations the tenant made to the property without the landlord’s approval. Tenants are held accountable for the cost of repairs even if they weren’t responsible for any damage.
Examples of damage to a rental property include:
Torn curtains
Holes in walls, not due to doorknobs
Stains on walls
Broken windows
Water marks from overflowing sinks
Burns on countertops
Unauthorized painting on the walls
Broken toilet seats or handles
How Much Should You Deduct from the Security Deposit?
There are a few things you should note.
First, you should properly document all of the damages done. Your property manager will carry out a move-in and move-out inspection if the tenant decides to challenge your claims.
Then, you’ll have to provide an estimate on how much it will cost to carry out repairs or replacements. Depending on where you live, you may be required to get a quote from a third third-party contractor. It is important to deduct an amount that is proportional to the damage caused.
Finally, you should return the deposit to the tenant within the allocated time (this could be two weeks to a month, depending on where you live).
Pro tip: Create a Fool-proof Lease
The lease should contain details related to the following:
Move-in and move-out checklist
What constitutes natural wear and tear
Maintenance responsibilities for tenants
Security deposits
Always take pictures of your property before the tenant moves in. This way, you can compare the state of the property after they moved out, making property management a lot easier.