What is Considered Normal Rental Property Wear and Tear?

Every state permits landlords to ask for a security deposit with the agreement to return it whenever the tenant wishes to leave the property in whatever state they found it in, with the exception of normal wear and tear. However, this term can be different depending on which property owner you talk to across the country. Some property owners might deem things as damaged and keep the tenant’s security deposit, while others may call it a simple repair.

In nearly every state, property owners are allowed to withhold a portion of the security deposit for excessive damage, however, this does not include normal wear and tear. Essentially, a security deposit serves as a protection for the property owner in the case the property gets damaged during the recent tenancy. This implies that landlords can deduct cash from the security deposit to help mend any item damaged.

As a property management company, we consider normal wear and tear as whatever occurs from consistent day-to-day use in the rental property. Some examples of what would be considered normal wear and tear are as follows:

Faded or yellowed paint due to sunlight and adverse weather conditions
Diry curtains and blinds
Faded curtains
Matted carpet wear caused by normal use
Furniture markings in carpet
Broken appliances (not from misuse)
Warped doors occasioned by moisture, temperature, or age
Dents in the walls caused by door handles
Pin or picture holes in the walls (not excessive)
Diary window screens
Loose door and window hinges
Worn out linoleum floor
Slightly worn out hardwood floors
Broken taps initiated by normal use
Worn out electric switches

All in all, even the most careful tenants are likely to experience some sort of wear and tear while occupying the property.

What We Consider Damage Beyond Normal Wear and Tear

There are various instances and cases that we would consider to be damage beyond normal wear and tear. If we as the property owner feel and believe that the tenant caused unnecessary damage to the property during the period of their stay, we have every reason to hold part or all of their security deposit to help pay for repairs.

Here is a list of some damages that would potentially prompt us to withhold some or all of a tenant’s security deposit depending on the extent of the damage:

Carpets: burns, tears, pet odor and stains, blotches, and food stains
Wall: marks, torn wallpaper, excessive number of holes, and stripped paint
Deep scratches and gouges on wood and concrete surface floors
Damaged furniture and broken or mission lighting fixtures
Cracked or broken glass, broken hinges, and missing or broken door and window knobs
Excessive dirt and grime that requires professional cleaning
Broken electric appliances like refrigerator compartments and stove burners that can no longer work
Broken mirrors, fixtures, broken or mission tiles, and clogged drainage system in the bathrooms

We consider any of the above damage instances as beyond normal wear and tear caused by a renter and would keep a portion, or all, of the security deposit. We advise tenants to avoid any such damages like the ones listed above by carrying out regular maintenance. Tenants can do so by participating in frequent vacuuming and dusting, cleaning electrical appliances, hanging things on the walls that do not require nails, cleaning up grime and stains immediately, and maintaining animals to refrain from unnecessary damage.

Move-In

Before a tenant move in, we walk the incoming tenant through the property and give them a full understanding of what we consider normal wear and tear and what would be considered unforeseeable damage. Any of the current defects or damages from the property will be documented so no accidental fault is taken. After going through the property, the tenant will agree to the present condition and sign the document.

Move-Out

Before the tenant moves out of the leasing unit, we carry out another inspection to access what has been damaged and what is worn from normal conditions. Pictures should be taken of any and all changes the property may have experienced and notes should be made. It is then important to explain to the tenant why or why not you may be withholding part or all of the security deposit. The renter will then either agree or disagree and can contest with reasons if there is disagreement.

It is important to not only have a move out inspection when the tenant’s lease is up, but you should also be conducting inspections throughout the time of occupancy. This can help to make sure you are keeping track of everything going on at the property and will also provide protection to your investment. Making needed repairs in a timely manner will create a better outcome for both the landlord and tenant.

Reach out to us and discover what we can do for you to lessen your stress and make your life more enjoyable while we manage your property.

The 4 Truths About Tenants

Here are 4 of the many truths about tenants. And I’m going to start off with number one, and all four of these are really important to understand. But the first one I think is probably the most important, and this is that tenants are awesome. They’re just awesome! So remember that, and keep that in mind throughout this article.

Then the second one is because they’re awesome, they deserve a great landlord. They deserve someone who is attentive, someone who takes care of them, someone who understands them and respects them. Now, remember, your residents are the lifeblood of your business, of your rental. Without them, you have nothing. And when you have a great one, it’s so important that they know it. And there’s a lot of ways that you can show them that you’re grateful for them and that you love them and that you’re happy to have them, and we can talk about that another time.

Truth number three. Not all tenants are created equal. You probably know that by now, and I like to think of it using the 80-20 rule. And I apply the 80-20 rule for even tenants that are all paying rent on time and fulfilling the lease. And what this means is when we’re thinking about our good residents that we have in our homes, there’s about 20% when it comes to mindset that will have a similar mindset as you. And what I mean by that is, for a lot of homeowners and owner occupants and folks who are taking a lot of pride in the home that they have purchased and that they live in, they tend to keep up on the yard. They tend to want to improve the value of the property over time, and so they have a certain bar that they set for themselves, and it may have been part of how they were raised, part of how they’re wired, but we just want our homes to look really nice. And this is more commonly found with owner occupants.

Now, this is just a very important misunderstanding that a lot of landlords have is that all residents are like you, and that’s not the case. About 20%, this is what I’ve figured, about 20% of the residents that are still good tenants, a good tenant, they’re paying rent, will have that same mindset of wanting to make sure the property is well cared for, make sure that the lawn is looking awesome, the flower beds are weeded, that the house is vacuumed weekly, or in the case of some of us, every other day, or it’s just really clean and looks really nice, and when there’s an inspection coming up and the landlord’s coming to visit, they hire a cleaning crew or they spend hours trying to prepare for it so that the landlord’s really impressed and wants to renew the lease, and they just are in love with them. That’s about 20%.

The other 80% are good people, but they just simply don’t have that same mindset. They’re okay with the lawn going a little bit. They’re okay with the house getting a little bit dirty. And they’re okay with that. They feel comfortable with that. That’s just how they were wired, how they were brought up.

And the important thing to recognize is truth number four, which is having a certain bar that you set for yourself and then having a threshold of tolerance below that bar. Okay? Because if you are expecting everyone to take care of the home the exact same way that you would, you’re just going to drive yourself mad. It’s going to be a horrible experience for you. Because, again, if you have someone like that, that’s awesome. You found one of the 20%! But 80% of the time, you’re not going to have someone like that.

So what you do to make it manageable is you have a threshold of about 20%, so if your bar is set here and you call that a hundred percent, then you say, okay, I’m going to have this threshold of tolerance that as I’m inspecting or as I’m driving by or as the neighbors are commenting, that I’m going to be okay as long as it’s within this threshold that I can tolerate, that I’m okay with. If it gets below a certain threshold, we’re going to have a conversation with the residents and we’re going to talk to them about what we expect, and let’s get within this threshold.

For example, if you see an inspection, photos from your property manager, or you’re inspecting yourself, and you see that they have done some things with the walls, maybe they’ve hung some things up, or maybe they have changed the color of this without your permission or maybe they have done some other alteration or maybe they’ve stacked boxes in the corner or in the closet or in one of the bedrooms and it’s looking a little bit cluttered. If you step back and you think about, okay, is this within that threshold? Is this really a big deal? Then you can start to realize that rentals can be pleasant, and it’s not going to drive us absolutely bonkers when it’s not exactly how we would treat that property.

Is it your property? Yes, it’s your property. But ultimately, you’re allowing someone to live there, and so it’s their home. It’s your property. It’s their home. There’s a big difference there. Okay? Your property is an investment, and you want to make sure that the value is being maintained in it. As long as they’re in that threshold and it’s not deteriorating the value of the property, I would relax, take a step back, and enjoy the ride because rentals can be a life of bliss for those that have the right mindset and understand the truth about tenants. If not, it’s just a real big hassle, and it will be something that drives you nuts, keeps you up at night, and creates a lot of stress and frustration.

To your land-lording success!

New 2020 Laws In Effect for Utah Landlords

On May 12th, several bills were passed that went into effect and became law. As a part of the government affairs committee for the Utah Apartment Association, Nate Tew has seen the time and effort put into monitoring, shepherding and negotiating bills to make sure any impact on our industry is for the best.

The following are new laws that impact our industry:

HB 462 – Unlawful Detainer Amendments: This bill changes the timing for a 3 Day Pay or Vacate notice from three calendar days to three business days. This bill also makes technical changes in the eviction process. At the occupancy hearings, if the tenant fails to appear, the court shall issue an order of restitution AND SHALL enter a judgment by default (unless the court makes a finding otherwise). It further provides that the tenant must keep the court apprised of their new address after an eviction without additional obligations on the plaintiff/landlord.

SB 39 – Affordable Housing Amendments: This bill allows the assignment of a special low-income housing tax credit certificate to another person if the qualifying taxpayer provides written notice to the Utah Housing Corporation. This bill also appropriates ten million dollars to the Olene Walker Housing Loan Fund. $5M is for gap financing of private activity bond financed multi-family housing, and $5M to be used to match private dollars for the preservation or construction of affordable housing units for low-income individuals

HB 164 – Property Tax Modifications: As it pertains to rental property owners, when ownership changes in a residential rental property, the new owner is required to submit a written declaration to the county assessor within 90 days after the purchase to certify the property is for residential use and qualifies for the primary residential exemption. The written declaration shall be signed by the residential property owner and be substantially in the form as provided in the statute.

HB 192 – Property Tax Assessment Amendments: This bill defines multi-tenant residential property as real property with 10 or more separate, residential housing units that qualify for the residential rental exemption. It provides that county assessors can value a multi-tenant residential property with an income approach. If the county assessor uses an income approach for valuation, then all multi-tenant residential properties in the county must be assessed the same way. If a county assessor chooses to use the income valuation approach, then the assessor must notify the owners and the owners are then relieved from filing a statement about personal property taxes on the premises. The personal property tax, if any, will be included in the property tax valuation when using the income valuation approach.

HB 268 – Property Tax Notice Amendments: This bill allows owners of properties to designate additional or alternative people to receive information or notice related to a property tax.

Credit: Law Offices of Kirk A. Cullimore