As any property manager will know, a rental unit will rarely be pristine after years of being lived in. And while minor issues may arise, sometimes the line between fair wear and tear and property damage may be blurry.
These gray areas can escalate quickly. Conflicts with residents over damages may lead to lengthy legal disputes, impact the property manager’s reputation, and potentially lead to financial loss.
As a result, management teams need to have a clear understanding of what constitutes normal wear and tear and what is property damage.
In this guide, we outline the main differences between the two, explain how to plan for the effects of everyday use, and offer tips on preventing damage to a rental unit.
“Normal wear and tear” refers to the deterioration of a property resulting from residents’ everyday use. As a property manager, you should expect minor damages any time a property is rented out without making residents responsible for them.
Examples of normal wear and tear include:
Several factors will also impact the extent or severity of the property's wear and tear, such as:
As opposed to fair wear and tear, property damage is significant and beyond the reasonable effects of everyday use. Residents will be held responsible for this type of damage, typically resulting from accidental or intentional negligence or carelessness.
Examples of property damage include:
Deep cleaning or minor fixes cannot solve these issues, unlike with normal wear and tear. Instead, they require more time, expertise, and money to repair. Property damage may result in residents losing part or all of their security deposit or, in severe cases, lead to eviction. You may also have to escalate it to a legal dispute.
Reasonable wear and tear is inevitable in any living space. As a property manager, you must proactively deal with minor issues to keep the property in top shape.
So, where do you start?
Budgeting is the basis for the effective upkeep of a property and long-term operational success. There are several rules of thumb that property managers can follow, including:
Regular visits to the property allow you to stay on top of things as they come up (or even before they do) and repair them promptly, helping to prevent major problems in the future.
Bigger appliances, such as ovens, refrigerators, or microwaves, usually last between 10 and 15 years, while soft furnishings may have shorter lifespans. Curtains, for example, typically need to be replaced every three to five years. Keep track of when items were first used so you know when to get new ones.
The outside of a property is also subject to everyday deterioration. For instance, in single-family homes, exterior paint must be redone roughly every five to 10 years, and roofs need to be replaced every 15 to 25 years. It’s up to you to make sure you plan for these from both a scheduling and financial standpoint.
Residents can give you a heads-up about any emerging problems, so make sure there’s always an open line of communication to detect issues early. Likewise, let them know in advance when an inspection is due or if work needs to be carried out.
While you can’t anticipate when or if property damage will occur, there are several steps you can take to help minimize the chances of serious damage:
Sometimes, despite the management team's best efforts, property damage occurs. Property managers can follow these steps to address it quickly:
Assess the damage: Conduct a thorough investigation of the property to understand the extent of the damage. Take pictures and videos to document the issues and have evidence in case of litigation.
Inform the residents: Notify the residents in writing, including a detailed description of the damages and adding images or videos to support your claims. Explain their responsibilities and contractual obligations as described in the lease agreement.
Repair the damages: Compare quotes from different providers and set clear repair timelines, ensuring the property is restored to its original condition. Record all costs and expenses relating to the works carried out.
Deduct the cost of repairs from the residents’ security deposit: Provide residents with a detailed list of the expenses being deducted, following local regulations to carry out the deductions.
Contact your insurance provider: If there is a policy on the property, file a claim where applicable, supplying supporting evidence.
Contact your legal team: If the residents refuse to take responsibility or dispute your claims, you will need help from a legal professional—and to support your case, you need evidence. Images and videos are essential (especially if you can supply ‘before and after’ material for comparison). Additionally, Minut’s event reports can be used where cigarette smoke, occupancy, noise, and humidity levels are part of the claim.
Managing a property portfolio successfully is all about prevention. As a property manager, it’s up to you to stay on top of repairs and act promptly on any major issues before they escalate. Doing so is the best way to both keep a property in good shape and make sure residents are happy.
Likewise, minimizing risk factors for property damage, from smoking to partying, is crucial. Minut can help you do precisely this, with real-time alerts that let property managers take action as soon as issues emerge.
Discover why over 50,000 property managers choose Minut to help them look after properties around the world. Book a demo today.
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