We all know that security deposits are funds reserved for repairs beyond “normal wear and tear.” What’s sometimes not so clear, though, is what exactly constitutes normal wear and tear.
This is one of those questions you should be ready to answer, both in order to give your tenants a specific idea of what is expected of them from day one and to make sure you remain in compliance with federal and state laws.
Essentially, security deposit funds are reserved for any damages a tenant causes to the unit he is renting. (Whether the necessary repair is the unfortunate result of an accident or simply negligence on the part of the tenant is not important … your only job is to look at the damage itself and make a determination from there.) The costs of normal upkeep and updates, on the other hand, fall on the shoulders of the landlord.
Although this all sounds cut and dry, in practice the line between damages and normal wear and tear is not always so clear. For example, say the drawstring on a set of blinds has broken off—at a glance this may seem like damage caused by the tenant. But if the blinds are old, it may actually fall under the definition of normal wear and tear.
On the other hand, while you’re responsible for making sure your units are thoroughly cleaned between tenants, you may be able to withhold money from a tenant’s security deposit if she leaves an extraordinary mess in her wake. According to Rental Housing Online, extreme build up of dirt and mold and stained carpets (just to name a few) can all qualify as damages. Be aware though, that even a careful tenant will likely leave behind some wear on the carpet and paint … and this falls under normal wear and tear. In many cases, you’re gauging the degree of, rather than the presence of, such occurrences.
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Following are a couple more examples that frequently cause confusion when it comes to deciphering between damages and normal wear and tear.
- Holes left in the wake of a former tenant’s pictures, shelves, and other wall hangings are a frequent nuisance for property managers. Pesky as they may be when prepping for your next tenant, a few carefully inserted nails for picture and shelf-hanging purposes will likely qualify as normal wear and tear. Holes all over the unit or large holes, on the other hand, fall under the damage domain.
- Paint can be another cause for confusion. As mentioned earlier, you should expect some minor scruffs and dings in a unit’s paint job as normal wear and tear. But what if your tenant has left a pristine paint job behind? Paint policies are often subject to specific lease rules but, generally speaking, even if your tenant has left a nice new paint job behind, it still classifies as damage if the color is significantly different from the original color of the unit and was not pre-approved.
Finally, although it’s been mentioned in previous Buildium blog posts, it bears mentioning again: always do a unit walkthrough with your client—both at the beginning and end of her lease. This will go a long way toward ensuring that both of your interests are looked after. In addition to running through a thorough checklist, you may even want to consider taking pictures of the unit’s current condition should any questions arise later on down the line. After you’ve gone through the apartment, carefully checking off what damages are present at the time of move-in, be sure that both you and the tenant sign off on the document and that the original copy is kept in a file for review upon lease termination. At the end of the lease repeat the process so that the tenant has a good idea of what sort of security deposit deductions she’ll be looking at ahead of time.
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