Landlord Tips & Tricks: How to Handle Tenants Damaging Your Rental Property
We’re all familiar with the nightmare to handle tenants damaging your hard-earned asset. They let pests infest your rental, have their pets ruin the walls and doors, and secretly smoke in the bedrooms—thinking that they’ve covered up the lingering smell and stains.
What were these tenants thinking? Whether they purposely or accidentally did the damage, it doesn’t change the fact that you now have to spend money bringing the home back to its former glory.
The good news is that there are better ways to handle tenant-caused property damages. We’ve had plenty of experience in doing just that for our clients by managing rentals in the past two decades. So, here are our foolproof steps for you to use.
Step 1: Identify the How the Damage Was Caused
Get to the root of the cause before you do anything. By knowing how the tenant caused the damage, you’ll know the best course of action to take.
There are generally two types of tenant-caused damages:
- Intentional Damage: Some tenants aren’t as careful as others and might not maintain the property as well as they should. Intentional damages include hosting rowdy parties, punching holes into the walls, tearing up carpets, and other damages that are done on purpose.
- Accidental Damage: Some tenants aren’t careless—they’re just unfortunate. Damages may be caused unintentionally, where the tenants had no control over the damages that occurred. An example of accidental damage is a broken faucet because of faulty water pipes.
Remember that it’s the tenant’s responsibility to notify you of any property damage, take responsibility for the situation, and ensure that damages are not something that happens regularly.
Step 2: Document the Damage Thoroughly
Next, document the damage thoroughly. Keep written records, photos, and even videos of everything once you notice the tenant is destroying your property. Of course, this will increase your property management tasks, but it’ll pay off on your end if any disputes arise.
Here are a few ways to document the damage:
- Have your property management company document the damages
- Have a professional inspector come in and assess the damages
- Use your move-in checklist to compare the damages to the original state of the house
Don’t forget to document all the communication you have with your tenant, too. Doing so will serve you greatly should the case go to a court of law, and will help you backtrack all the things you’ve discussed with the tenant.
Step 3: Estimate the Cost of Repairs
Estimate the cost of repairs or hiring a professional cleaning service. This is important, especially when the damages are extensive and you’ll have to resort to a contractor instead of just a handyman.
Here are a few things to consider:
- Working with a Property Management Company: If you’re hiring a third-party help to manage your properties, they should have a network of reliable vendors with the experience to do the work quickly, professionally, and at an affordable price. The property management company will also oversee the repairs and ensure that they’re completed well.
- Working by Yourself: If you’re managing the property yourself, you’ll have to get in touch with contractors to see if you can get a discount depending on the volume of work and materials required to finish the project. Ensure that the contractors you work with are professional and won’t leave you with substandard work (that’ll likely break down again soon).
Either way, the goal is to have an accurate estimate of the repair costs. This is also key to your long-term investment plans when you’re going to put the property back in the market, as the quality of work done to the property will determine its value down the line.
Step 3: Discuss the Damage with the Tenant
With the situation now clear, it’s time to discuss the damage with the tenant. Your goal is to resolve the issue amicably, so remember to have some kindness in solving disputes.
Here are a few types of tenants that you might encounter during the discussion:
- An agreeable tenant will admit to the damages they caused and assure you that it’s only a one-time thing. You’ll know if they’re being honest if they have a long-standing, positive reputation. If the tenant can’t cover the repairs, you can work out a favorable payment plan.
- An aggressive tenant won’t accept your reasons, and you might have to call the police or sue them in a small claims court for the damages. If the tenant continues to damage the property, you’ll have to proceed with the lengthy eviction process to remove them from the home.
- An unresponsive tenant won’t even listen to what you have to say. You can use the security deposit to get their attention, contact your insurance provider (if your insurance policy covers it), or proceed with the extreme route of hiring an attorney to seek compensation from the tenant.
As always, the best way is to refer to the lease agreement, pointing to the clauses that explain the consequences. Talk to them about the severity of the situation, and the consequences of their actions, and be reasonable if you have to sue them for the damages caused to the property.
Step 4: Deduct from the Tenant’s Security Deposit
Once the situation is clear with the tenant, you can deduct the cost of repairs from their security deposit. The whole purpose of having a security deposit before the tenant moves in is to cover any damages caused during the occupancy period, so you don’t have to use your own money to pay for tenant-caused damages and repairs.
Here are a few reminders when deducting from the security deposit:
- Notify the tenant of the amount that they can’t get back via written documentation. They should know how much of the deposit is now non-refundable.
- List all the damages that the security deposit will cover, the amount of each repair, and the documentation of the tenant destroying the property. Itemize all the repairs in detail.
- Never overcharge the cost of repairs to gain a profit from the citation. We still want to be fair to the tenant, even if the damages they’ve caused are done on purpose.
You’ll also want to double-check your state laws regarding the tenant’s security deposit. Ensure that you’re being professional and legal with charging them for the repairs.
Step 5: Take Legal Action If Necessary
If the security deposit isn’t enough to cover the damages or if the tenant is no longer contactable, you can consider taking legal action against them for compensation in a small claims court.
Note that this is the most extreme resort and should only be considered if there’s no other option left. Ensure that you’ve documented everything and have sufficient evidence of the tenant causing property damage before going down this path.
Here are some options for taking legal action for tenant-caused damages:
- Report to the police. They may arrest the tenant or place criminal charges if the damage is extensive, or if there are valuable items stolen or vandalized.
- Seek restitution via a civil court. If the police won’t make an arrest, get in touch with your attorney and proceed with seeking restitution in a civil court. You might not recover much if the tenant has been delinquent with the rent payments for quite some time already.
- Contact your insurance company. If your insurance policy covers all or some part of the damage, they may ask for a police report and follow through with managing the situation.
Whichever the case, be patient and take your time to assess the situation from all angles. Follow the proper procedures to find an amicable solution that will be favorable to everybody—your tenants will be more responsive and accommodating if you’re reasonable, calm, and collected.
Protect Your Property, Protect Your Returns
It’s never a pleasant situation to have your tenants damage your property. After all, these are tenants that you gladly accepted, thinking that they’ll do a good job maintaining your hard-earned assets. Still, tenant-caused damages are unfortunately inevitable, so you’ll need to learn how to handle them well.
As long as you don’t let your emotions get in the way of finding a solution that is fair to all parties involved, a setback like this on your investment journey won’t throw you off balance too much.
Do you need more help in property management? Our team of expert property managers has dealt with more than a handful of tenant damages in the two decades we’ve been operating in Metro Detroit. Get in touch with us for the quality, professional service you need.