Landlords pay for wear and tear. Tenants pay for tenant damage. It’s a simple rule. Or is it?
“Ordinary wear and tear” is one of the blurriest legal terms in property management, and the distinction is far from easy to spot.
Lawmakers have attempted to define the term with more clarity. In Texas, the circular definition of wear and tear is “deterioration that results from the intended use of a dwelling,” including “breakage or malfunction due to age or deteriorated condition.” Colorado focuses on the root cause — “deterioration that occurs without negligence, carelessness, accident, or abuse.” Massachusetts opts out of a definition, leaving it to the courts.
And, ultimately, it is a judge who decides whether a disputed item is wear and tear or damage. But that happens at great peril to landlords. Once the tenant goes to court, and if the landlord loses the argument, there may be fines and penalties — like three times the amount withheld and the tenant’s attorney’s fees — for wrongfully withholding the security deposit. A landlord could end up owing the tenant more money than the original deposit.
There is no universal guidance for determining wear and tear versus damage. But there are some rules that landlords should NEVER break:
Rely on the move-in checklist when evaluating damage. Any deduction taken should be for something that was not present at the time the tenant moved in.
Because there is no comprehensive list of wear and tear versus damage, don’t attempt to create such a list in the lease agreement. It might seem like a good idea to include some examples. But that list inevitably will grow. The longer and more specific the list, the harder it is to claim a security deposit deduction for something that’s not on it.
Even if the lease agreement sets out items deemed to be damage, and even if the tenant agreed to those terms, the landlord cannot take a deposit deduction for anything that is, legally speaking, wear and tear.
Instead of listing wear and tear items, focus on tenant behavior that is likely to cause damage — hanging pictures, watering plants, burning candles or cigarettes, ignoring water leaks and so on — and add some common sense restrictions in the lease agreement. If no damage occurs, there’s no need to deal with it.
Where possible, do the final walk-through with the tenant and discuss the items you are likely to declare as damage. Discuss the tenant’s objections at that time. It’s better to resolve the issue at this point than to go to court. If the tenant understands the reason for the deduction, they are less likely to talk to an attorney.
Never take “standard” deductions from security deposits. This is particularly problematic with multiple tenants. It’s statistically impossible for every tenant to damage a unit in the same way every time. At least, that’s how the courts are going to see it.
For the same reason, don’t allow a new tenant to move in before fixing whatever the previous deduction was for. Otherwise, it will be difficult to prove that the deduction was necessary.
Don’t take deductions for items that are not going to be fixed.
Never charge more than the actual cost of the repair.
Finally, do your best to stay in the “zone” and think twice before taking risky deductions. If you wind up in court, it helps to show you made a good faith effort to comply with the law.
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This post is provided by the Landlord Credit Bureau to help landlords and property managers reduce the risks of rental income loss and avoid rent theft. The Landlord Credit Bureau provides articles on Reporting Tenant Rent Pay and Tenant Screening to ensure necessary information is readily available to all Landlord & Tenants.
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The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.