As you may be aware, a tenant is entitled to “normal wear and tear” or your rental. But the adjective “normal” can be problematic. What is normal to the tenant may be excessive to a property management company or owner. When deciding whether to deduct damages out of a tenant’s security deposit, here is what we consider:
- By law, you can deduct for a reasonable cleaning of the unit at the tenant’s expense. In our addendum, we specify the cost of this cleaning which includes carpet as well the interior. If the tenant has hired their own cleaning crew and it meets our standard, we do not charge this fee.
- If you rent a unit to a family of 7 with 2 pets, the expectation of normal wear and tear will be much higher than if you leased to a single professional without any pets. That is why you should ask for a higher rent instead of a higher security deposit when leasing to a tenant from whom you expect more damage.
- The courts have ruled on the degradation of flooring and paint over time. You should expect flooring (particularly carpet) to degrade over time. We use a 20% rule. If a tenant has been in the property 3 years, we expect the useful life of the carpet to be 40%. If the carpet were ruined, we would charge the tenant for 60% off the new carpet. This has been upheld when challenged in court. If a tenant has been there 5 years or more, it is difficult to recoup the cost to re-paint and re-floor the interior. You can recoup costs for damages to the unit such as holes in drywall or other items, but the reserve for normal wear and tear has been exhausted.
When we hold the security deposit for our owners, we go to court for them at no extra cost. Here is what we have learned at court, and what the judge at small claims frowns on: taking the tenant’s money to make improvements to your rental. If you document well, observe the rules of “normal wear and tear” and present your case dispassionately, you should win. This is small claims court and it is common for the presiding judge to want to “split the baby in half” and do what they can to make all parties happy, and that may mean giving more money to the tenant than they are legally obligated to.