How To Handle Damage In A Rental Property
Not all leases go as smoothly as you anticipate. Every now and then you will come across a tenant who causes damage to your property. The actions you take as soon as you find out can determine just how the rest of the process plays out. It should go without saying that you should have a security deposit that will cover any unexpected repairs. Just because you have this money doesn’t give you the authorization to spend it as you wish. Even if there is damage you still need to document your actions and follow a few important steps prior to doing any repairs. Without this documentation you open the door to a potential lawsuit even if you are in the right. Here are five steps for how to handle damage in a rental property.
- Before And After Photos. The first step in dealing with property damage starts well before you discover any issues. At the time your tenant moves in you should document the condition of the property. Take as many photos and send whatever video you may have to your tenant for confirmation. This is an important part of protecting you at the back end of your lease. The minute you discover an issues with the property you need to capture documentation. If you find damage during a routine walkthrough in the middle of your lease you need to stop what you are doing and snap a few pictures on your phone. As long as the pictures are high quality and are date and time stamped you should have enough “evidence” to move forward. It may even be a good idea to keep a decent camera in your car to avoid any issues with the validity of the pictures.
- Alert Your Tenant ASAP. Once you have physical documentation you need to reach out to your tenant. It is not enough to place a phone call and hope for the best. A phone call may be a good start but you also need to send an email and possibly even a certified letter. The goal with this stage is to acknowledge that your tenant is aware of the issues. In most cases they will accept responsibility for the problem and look for a remedy. In a very few cases they will argue that they had no knowledge of the damage and didn’t know it existed. By sending a date and time stamped email or letter you have proof that they understand the situation. You may have the best tenant in the world but when faced with losing money they may act completely different. If they decide to sue you to recoup the loss of security deposit you have proof that they were aware of the situation.
- Provide Cost Of Repairs. Prior to reaching out to your tenant you should have a few contractors lined up ready to provide an estimate. The first question that is typically asked by tenants is how much it will cost to fix the problem. They may offer to fix it themselves or have someone they know take care of the repairs. Unless they are licensed and insured this should be totally out of the question. By having the wrong person do repairs you may be simply putting a band aid on the problem. Always try to get at least three quotes so you can avoid having your tenant accuse you of using a friendly contractor. With any quotes you receive you should ask for everything in writing and broken down as much as possible. Give these quotes to your tenant and notify them you are going to pick one and get the work done. You never want to let a repair linger because your tenant thinks they can find a cheaper alternative.
- After Pictures. Most tenant property damage is discovered at the end of the lease, usually during the final inspection. This can be a delicate balance of trying to get the work done will showing the property or having a new tenant move in. Your old tenant will most likely be irritated and press to have their security deposit returned as soon as possible. As soon as the work is completed you should take multiple photographs and send them out to your tenant. Only when your tenant acknowledges receipt should you consider sending them back their outstanding security deposit.
- Deliver Breakdown Of Security Deposit. After the repairs are done you should reach out to your tenant to deliver the security deposit. You can bet at this point that there will be some hurt feelings and bruised egos. You have every right to ask for money if a closet door is broken or the toilet paper dispenser is broken. Tenants usually think these items are small and you are petty if you ask to have them repaired. The fact of the matter is that small items quickly add up. Before you know it you can be on the hook for several hundred dollars that would come from your pocket. Even though you have every right deducting this money you should always try to end a lease on good terms. Instead of mailing out the check you can ask to meet them at the property. This allows them to get their check quicker and it gives you a final chance to part as friends.
If you own rental property long enough eventually you will run into property damage. If, and when, you do use these five tips to help make the process as easy as possible.