We know that property damage is a major concern for the Santa Cruz property investors and landlords we work with. Renting out a property always comes with risk, but no one wants to deal with the damage that can be left behind by a bad resident.
When your property is professionally managed, this rarely happens. We have screening mechanisms in place, and we frequently inspect. However, if you do have to respond to residents who have damaged your property, you’ll need to know what to do.
We’re talking about this today. Make sure you have a process in place for holding onto a security deposit when a resident has damaged your rental property.
Review Your Lease Agreement
Your first step is to check and review your lease agreement. It should state what the resident’s responsibilities are in terms of taking care of the property, and what the landlord is entitled to do if the property is damaged due to abuse, neglect or misuse. Make a copy of the lease section that applies to this situation so you can send it to your resident.
Checking for Property Damage
After a resident moves out, you’ll go into the property to conduct your move-out inspection. This might be the time in which you notice all the damage. Be careful and document everything. Take pictures. Take videos. Make notes. Compare all of this documentation to the move-in report so you can clearly establish the damage.
Put together your list of damage and begin getting it fixed. While your first instinct might be to immediately start collections proceedings against your resident, your priority actually needs to be fixing the property. You want to be able to rent it again, so focus on making it habitable once more.
Collect Repair Estimates and Schedule Work
Contact your best local vendors and contractors to assess the damage and provide estimates. You’ll need to know how much repairs will cost and how long they will take. Get copies of estimates, invoices, and receipts. The more documentation you have, the stronger your position will be when you withhold the security deposit.
Use the reports from your contractors to determine what exactly qualifies as resident damage and what they should be responsible for paying. It’s important to make the necessary deductions for the life span of things like paint and carpet. You have to be fair, even if your tenants caused damage to your property.
Once you have these estimates and invoices in place, you can let your residents know that you’ll be keeping all or part of the security deposit. Let them know why, and provide your detailed documentation as back up. Provide the section of the lease that addresses this as well. It’s unlikely that they will dispute your security deposit claim. If your residents owe more than the amount of the security deposit, you’ll have to decide if it’s worth taking legal action against them to recover the money.
We can help you take care of any property damage left behind by residents. If you have any questions, please feel free to contact us at PURE Property Management.
