Where Real Estate Investors & Landlords Go for Success

    Defining Normal Wear and Tear vs. Actual Damage

    Normal wear and tear is generally considered any damage that naturally occurs over time due to aging and regular use by a tenant living in the property. It’s considered normal depreciation, the kind of entropy that happens via the day to day use of a property. Normal wear and tear is expected, and landlords are expected to fix it without incurring costs to the tenant.

    Damage, in contrast, is caused by neglect or abuse of the property by the tenant. It is anything that occurs outside the normal bounds of daily living and can usually be clearly noticed. Unlike normal wear and tear, the landlord is not expected to fix damage caused by the tenant for free.

    Because the line dividing normal wear and tear and actual damage can seem elusive, especially to the uninitiated, let’s take a look at some examples. The more familiar you can get with the differences, the better position you’ll be in to assess costs. We’ve broken down the examples by category below:

    Walls

     
    Normal wear and tear might consist of small nail holes, chips, smudges, dents, or even cracks from the building naturally settling over time. Damage would look more like large holes, bad unauthorized paint jobs, chunks missing, rips, and beyond. If the walls need new paint after the tenant has lived in the unit only a couple years, the cost of a new paint job may be charged to their deposit, but if it’s been three to five years or more, that would be considered routine maintenance.

    Flooring

     
    Normal wear and tear would look like faded or worn carpet from walking, furniture, and general use over the years. Hard floors might have scuffs from furniture, worn patches from lack of varnish, or sun damage. However, stains from food or pets, burn marks, large tears, and fraying carpet would be damage. Similarly, chipped, gouged, or water damaged wood flooring would certainly be considered tenant-caused damage.

    Cleaning

     
    Most landlords will have a rental unit professionally cleaned between tenants—and in this case, you can’t charge each prior tenant for the cleaning job because it would be considered routine maintenance. However, if the tenant never cleaned their space the entire time they lived in it, and you are charged extra by the cleaners because of the work required by the conditions, you would be in the clear to bill the extra charge (but not the entire cleaning bill) to the tenant’s security deposit. Just remember that if you expect tenants to clean their unit before moving out, put that requirement in the lease agreement and include guidelines and expectations. Otherwise, do not expect this.

    Appliances

     
    All major appliances, including water heaters, air conditioners, refrigerators, and ranges, have a specific life expectancy. This amount of time is determined by the manufacturer and can usually be found on the unit itself or in its documentation when purchased. With this in mind, it’s important to know that a tenant cannot be charged the full replacement cost of an appliance unless it was brand new at the time it was damaged or broken. However, for example, if a tenant manages to break a refrigerator only five years into its ten-year lifespan, they can be charged up to 50% of the cost to replace it. When in doubt, check with this Housing and Urban Development (HUD) list of common appliances and their respective life spans.

    How to Document Wear and Tear vs. Damage

     
    There’s a clear process to documenting the difference between normal wear and tear and actual damage to the rental property, and it can be done in four simple steps. Once you’ve sorted out the standards for identifying the two, it’s relatively easy to document the process and consequently understand exactly what the tenant’s responsibility will be.

    During this process, it is of paramount importance to conduct a proper move-in and move-out walk-through with each tenant. Here is where you’ll catalog the specific differences, allowing you to identify exactly what you, as a landlord, need to fix right away. It will also allow you to know exactly what you’ll be able to deduct from the tenant’s security deposit. Here’s how:

    Step 1: Conduct Your Landlord-Tenant Move In Checklist

     
    You do have a checklist, right? As a landlord, your move-in checklist should cover all the important bases, making sure to note the preexisting condition of everything in the rental unit. This includes flooring, walls, appliances, plumbing, bedrooms, bathrooms, kitchen, and every other important aspect.

    With your checklist at hand, go through each room of the property with the new tenant. Document the current condition and photograph each area for proof. Don’t forget to include the appliances and any outdoor areas included with the unit. This puts you and the tenant on the same page and ensures a fair assessment of the property.

    This is also a required step to be in compliance with state law and if you wish to retain any portion of a security deposit for damages.

    Step 2: Keep Up with Regular Maintenance

     
    As a landlord, you need to conduct regular inspections of the rental property or two reasons—to keep yourself and the tenant up to date on the condition of the property, and to ensure that any necessary repairs are done as soon as possible. Conducting routine inspections is also a great way to show the tenant that you care about the property and that you expect them to care as well. Additionally, you will be able to keep better track of ongoing wear and tear and note any actual damage as time goes by.

    Step 3: Respond to Tenant Requests in a Timely Manner

     
    This is just universal advice when it comes to maintaining a landlord-tenant relationship, but it belongs on this list too. By responding in a timely manner to important tenant requests, you’ll ensure that the tenant trusts they are being taken care of—which in turn helps ensure that they will pay rent in a consistently timely fashion. Of course, this also ensures that you’ll always be on top of any potential maintenance issues, resolving problems before they worsen or grow more expensive. Even better, this practice can help prevent tenant-caused damage by showing that you will see any problems virtually as soon as they arise.

    Step 4: Conduct Your Landlord Tenant Move-Out Checklist

     
    As soon as your tenant has moved out, you’ll need to conduct a full move-out checklist. Just like the move-in checklist, this will cover all important aspects of the property’s current condition. Make sure to go room by room in the same way you did before, noting any damage and wear and tear, photographing each area for evidence. The photographs will help you compare and notice anything that might not have been apparent during your walk through.

    Once your checklist is completed, compare it with the move-in checklist to get a complete picture of any accumulated damage. This will help you recognize who is responsible for any damage and how much it will cost to fix. That cost can then be deducted from the security deposit.

     

    Disclosure: This Knowledge Base article is accurate as of the last update. Laws and policies are subject to change. If you have any questions, please call the office. Click here for contact information.