Picking up the Pieces After Rental Property Is Damaged
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Discovering damage to a rental property is every property manager’s nightmare. Looking into the incident can be laborious, especially when the tenant who probably caused it already left.
Knowing what to do in such a situation is the key to getting sufficiently compensated to fund necessary repairs. Still, it’s easy to make mistakes that can needlessly cause the issue to escalate.
Wear and Tear vs. Accidental Damage vs. Intentional Damage
Property damage can fall into these categories — wear and tear, accidental and intentional.
Wear and tear is damage from the rental’s natural deterioration. Regular maintenance can delay it, but it’s inevitable. The landlord is financially responsible for ordinary wear and tear, not the tenant.
Accidental damage is when the tenant is at fault but may not be fully liable since it’s unintentional. On the other hand, intentional damage is when the renter destroys the property due to carelessness or vandalizes it, making it entirely responsible for repairs.
How to Handle Accidental Property Damage by a Tenant
If the property damage is accidental, follow these steps.
Call the Authorities
If necessary, contact the police to investigate a possible crime. Property damage isn’t always as it seems, so let law enforcement officers get to the bottom of it. Involving the authorities creates a public record — like a police report — which can be helpful when discussing the matter with the tenant or filing an insurance claim.
Record the Situation
Documenting the property damage matters to preserve its condition digitally. Take photos and videos as soon as possible and note everything broken or missing. Having a list of items the landlord owns and their condition pre-tenancy helps when making before-and-after comparisons.
Notify the Insurer
If the rental is insured, contact the agent or broker who sold the policy or the landlord’s insurance company. Speaking with a competent insurance professional is vital to understand the next steps in the claims process.
Dealing with a significant case of property damage can be nerve-wracking, but not knowing what to do makes things even more stressful. Get all possible information to introduce a sense of clarity to a confusing situation and set expectations accordingly.
Wait for an Adjuster
An adjuster is a professional who investigates an insurance claim to determine whether the company should pay and how much. They have various duties, including personally inspecting the rental, reviewing public records, and interviewing witnesses to shed more light on the case.
A property claims adjuster can be the insurer’s representative or an independent party hired by the landlord or property manager.
Generally, the rental should remain untouched before the adjuster’s visit. However, the landlord or property manager may have to address urgent repair needs when the situation poses health and safety risks.
How to Handle Intentional Property Damage by a Tenant
If the tenant is at fault, heed these tips.
Only some tenants willingly shoulder the cost of home repairs without proof. Even agreeable ones may dispute the damage claim, so it’s best to document the rental’s bad condition beforehand to strengthen one’s case.
Review the Lease
The lease agreement defines the difference between normal wear and tear and property damage and who’s responsible for what. Focus on clauses regarding maintenance, repairs, and tenant negligence to see who’s at fault and what resources are available for the landlord or property manager.
Get Repair Estimates
Obtain quotes from multiple contractors to have a ballpark figure on repair costs. Estimates from professionals carry weight, so they can be useful when convincing the tenant to accept their financial obligation.
Some home repairs don’t require credentialed pros, so forgoing the benefits of hiring a licensed contractor may be an option. The property manager can have renters pay for a surety bond instead of making a security deposit, providing financial protection. Repairs can be delegated to staff. Taking this route can be less costly and less time-consuming.
However, it can result in substandard work and building code violations. Misjudging the complexity of a project can involve underestimating its cost. Persuading the tenant to fork over more money to cover unforeseen construction expenses is more challenging than asking them to take responsibility for the damage.
Notify the Tenant
Let the tenant know about the situation in writing. Be as detailed as possible when describing the extent of damage and include solid evidence backing the claim. Mention how much it costs to restore the rental in good condition and the amount the renter must shoulder based on the lease.
Be reasonable and amicable to discourage the other party from becoming defensive and aggressive. Antagonizing the tenant can aggravate the issue. They may refuse to respond, become threatening, take legal action, or abandon the property.
Being cordial goes a long way because any tenant with foresight wants to resolve the situation civilly. Unresolved property damage claims can follow them around because these cases can reflect on their risk score on tenant screening reports, negatively impacting their ability to find housing in the future.
Tenants who agree to cover everything or split the bill can pay it out of pocket or permit the property manager to use their security deposit to finance the repairs. A payment plan can make the expense more manageable if the renter has inadequate funds.
Be on Damage Control With Your Rental Property
The accidental or intentional damage to a rental unit may be the tenant’s fault, but the property manager who mishandles the claim will be in the wrong. Remember these tips when dealing with incidents to receive just compensation for what happened fast and with little stress.
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Evelyn Long is a writer and editor focused on home building and construction. She is the co-founder of Renovated, a web magazine for the home industry.