How to Determine Reasonable Charges for Tenant Damages
What to Deduct From the Security Deposit
If a tenant damages a rental unit, the landlord has the right to charge the tenant for the damage by deducting money from their security deposit. Following certain rules will help you determine what the reasonable charges for tenant damage are and they will be more likely to hold up in mediation or small-claims court if the tenant refuses to pay or accept responsibility for the problem. Here’s what to consider when determining how much to charge a tenant to repair or replace damaged items in your rental unit.
Inspect the Unit Before They Move In
One of the most crucial parts of being able to charge a tenant for damage actually occurs before the tenant even moves in. The move-in inspection documents the condition of the rental property at the time a tenant moves in, including any existing issues. Consider making a checklist that will help serve as proof that the unit and fixtures were in good condition when the tenant moved in.
The tenant must sign the move-in inspection checklist, stating that they agree with the condition of the property, plus anything they disagree with.
You Can’t Charge for Normal Wear and Tear
Landlords can charge tenants for damage caused, but they cannot charge tenants for normal wear and tear. Normal wear and tear occurs because of ordinary use, while damage occurs because of abuse or neglect.
Wear and Tear vs. Damage
Cabinet door won’t fully close
Shower needs to be recaulked
Stains on carpet
Large holes in drywall
Factors to Consider When Determining Repair Costs
Repairs tend to be so specific that it can be difficult to put together a standard list of potential repair costs at your property. For example, one tenant may flush a diaper down the toilet and cause the entire main sewer line at the property to back up. Another tenant may do the same thing and only cause the toilet to temporarily overflow, but that could cause water damage to the ceiling of the tenant on the floor below. Whatever happens, you should investigate each repair to determine the specific cost. Below are a few factors to take into account.
- Age of item: Was the item that was damaged brand new, or had it been in the property for 10 years?
- Original cost of item: How much did the item cost when it was originally purchased? Was it a $20 smoke detector or a $500 vanity?
- Repair or complete replacement: Does the repair involve fixing a small part of the item or replacing the whole thing? For example, will you just be replacing the vanity top or will the entire vanity need to be swapped out?
- Length of time to complete repair: Does the repair simply involve going to the store to get a replacement, or will it be a four-day process to re-tile a bathroom floor?
- Special skills needed to repair: Will you have to hire someone else to complete the repair, such as a licensed plumber or electrician?
Get Various Contractor Estimates
For repairs that require you to hire a contractor, you may want to get two or three estimates from different contractors for the repair.
You can provide the tenant, and the court, if necessary, with a copy of these contractor quotes so they understand how you arrived at the repair cost.
You can also use websites like HomeAdvisor to get an estimate of average costs in your area. Its True Cost Guide may help you with estimates. HomeWyse also allows you to estimate material costs, installation costs, and maintenance costs in your ZIP code.
Provide Copies of Receipts
When you charge tenants for a repair, you must give them a copy of the receipt for materials and labor used to complete the repair. If you have not yet completed the repair, you must provide them with a good faith estimate of how much it will cost to complete the repair.
Give an Itemized List of the Damage
When you are taking deductions from the tenant’s security deposit, you must provide the tenant with an itemized list of all damage and the cost of each repair. This must be included when you return the security deposit amount owed back to the tenant. You must include any relevant receipts or estimates for work.
If you are charging a tenant for damage during your renter’s tenancy, you must still send them written notice of the damage they have caused at the property and an invoice giving a breakdown of the amount they are responsible for paying. Again, you must include any receipts, and actual or good faith estimates.
Standard Cleaning and Repair List
Some landlords include a list of standard repair costs in their lease agreement. This list details different types of damage and how much you will charge the tenant to repair it. For example, you could write “Replacing Missing Smoke Detector: $40” or “Replacing Broken Glass in Window: $150.” However, there are pros and cons to this approach.
The upside to a repair-cost list is that tenants will be aware of how much you will charge them for specific damage. Also, if a tenant signed this repair list and agreed to these amounts as part of the lease, the tenant might have a hard time disputing the cost of such repairs in court.
The downside is you may have a hard time being able to charge more than the amount on the list if the repair turns out to be more extensive than expected. In addition, tenants may not be as careful or worry about thoroughly cleaning the apartment upon move-out if they feel the amounts you charge for such repairs are small.
The Bottom Line
Being a landlord is likely to involve cleaning up tenants’ messes or accidental damage in your units from time to time. But if you’re prepared for calculating how much to charge them to repair or replace damaged items, and familiar with local tenancy laws, you should be able to fix the problem—or be ready to represent your case in court. Consider these best practices for deciding how much to deduct from a security deposit at move-out and what to charge a current tenant who reports damage.