Normal Wear and Tear: What is that?
The truth that many investment property owners don’t want to hear is that, it is likely that the condition of your investment property will decline over time.
It becomes hard for some investors to accept, especially when they don’t see their property very often, have never seen it, or live in another state or even country.
Tenants cause wear and tear to a property, just as an investors own home will start to show signs that is has been lived in. It is just a matter of usage.
So, when is it normal wear and tear and when is it something that is chargeable to the tenant?
The owner of an investment property should be prepared to do a few things between tenants at their cost, such as:
- Clean the unit.
- Clean the carpets.
- Make sure all fixtures are in working condition and that the home is safe and secure.
But occasionally, tenants do leave the home with something greater than normal wear and tear. What can be done then, and what are the limitations?
Some things, like cleaning, become a fluid-type issue. Usage of a home may make some things dirty and depending on the court, may include dirty appliances as normal.
Carpets are one that many landlords want to be able to charge a tenant for, but there is a rule of thumb regarding carpets. Carpets have a lifespan, and that lifespan is usually figured at 5-7 years. Therefore, to claim any damages on the carpeting, the property team must take age into consideration.
As an example, the cost to replace the carpet after the tenant left for $1,000. But because the carpet was already 3 years old, the most you could charge back to the tenant would be approximately $400. This sometimes can make an investor nuts, since they had to eat the whole thing, but the courts are very big on depreciation.
Paint is another one that can be tricky. Depending on a court, the life of paint can be anywhere from 3-10 years. Also, scratches, scuffs and nail holes are considered normal wear and tear but may necessitate touch-ups or re-painting that would not be chargeable.
So, you can see that “normal” wear and tear can be an elusive term. It is open to many interpretations, between tenants and landlords and between different courts. The best bet is to think of your own home and what you see in your home after living in it awhile. Also, you must keep in mind that the paint and carpet in your own home may be of higher quality than your investment property.
Okay, great, but what would be beyond “normal” wear and tear?
That is a great question.
Things that have occurred through the tenants accidental or neglectful behaviors are definitely beyond the norm.
For instance, mold growing in the property because a tenant refused to property ventilate the property can be one of those instances.
Allowing repair issues to continue without notifying the management team, which leads to even more damage, can be an issue listed under damages.
The biggest thing is making sure that the tenant fills out their move-in report within 7 days of occupancy as required by law. This should list any damages or issues the tenant notices and does not want to be charged for at move in.
This way, after a thorough move-out inspection, these items will be easier to show to a court, or to the tenant.
Ultimately, it is always the landlord’s responsibility to prove damage over and above “normal” wear and tear, and the best way to do that is by documenting everything!
Brian DiBartolomeo is the founder and broker of Cherry Hill Real Estate and speaks to many investors and property management professionals about the importance of documentation and tenant relations.
He can be reached at email@example.com or through the Cherry Hill Real Estate website at cherryhillre.com.
If you are interested in becoming a client of Cherry Hill Real Estate, give us a call at (248) 651-2700.