Common Loss: Tenant Damage

Common Loss: Tenant Damage

Your house is one of the most invaluable assets that you have. And when you plan to lease it to someone, you are always looking for an ideal tenant who understands the incalculable worth of your house. Homeowners are always subjected to this ordeal of finding perfect tenants as Tenant Damage is one of the most common types of damages that happens to your property. Tenant Damage can take a number of forms from water damage caused to your house due to the negligence of the tenant to an intentional spiteful destruction caused by the tenant out of vengeance shortly after tenant’s eviction.

There are a number of options that you can avail in order to compensate for your loss if and when you have to deal with Tenant Damage. Generally, a standard homeowner’s Insurance does not cover for all the damages caused by tenants. However, you can sign up for Landlord’s Insurance that will help you recompense for Tenant Damage. Although Landlord’s Insurance is the most fascinating and helpful option you have, the recompense it offers has a limit too.

The most decent way to combat Tenant Damage is to be extremely vigilant when choosing a tenant. Running background checks, taking inventory of the property, and taking photographic evidence of the state of the property before you lease it are a few things that you must do to fight Tenant Damage. Oftentimes, the real ordeal is to figure out who has to recompense for the damage and how much compensation are you entitled to. This is why the foremost thing is to apprise yourself what is classified as actual damage and what is classified as wear-and-tear. Because, you are not entitled to receiving a penny if it’s general wear-and-tear.

Types of Tenant Damage

Non-Intentional Damage

This type incorporates two types of Damages:

Wear-and-Tear

Minor marks, scuffed walls, broken blinds, or nail holes are some of the examples of general wear-and-tear. This type of damage can range from minor damage to serious damage depending upon the period of tenancy. If a tenant is moving out after 10 years, you may face some serious losses like damaged plumbing fixtures. Therefore, the tenancy period must be taken into account before stipulating anything in the Tenancy agreement. Oftentimes, the security deposit which is basically the money held in trust when you sign the Tenancy Agreement. This deposit is held in order to ensure the lessor against default by the lessee. It is one of the most crucial parts of rental agreements. Wear-and-Tear is usually addressed through the security deposit. That is why drawing that fine line between common wear-and-tear and damage caused by negligence is crucial if you want to efficiently combat Tenant Damage.

Accidental Damages and Damages caused by Negligence

Accidental Damages include damages caused by fire, water, storm etc. These damages may also include the acts of vandalism or theft. These are the damages that are neither included in general wear-and-tear nor in intentional damage. Fires are at times caused by the acts of negligence performed by the tenant such as leaving something unattended on the stove or in the oven, hanging fabrics near the fireplace or room heaters, or leaving the faucets running for a long time. These damages are usually covered under Homeowner’s Insurance policy but, there may exist exceptions. If any damage is caused due to the negligence of the tenant, you are entitled to indemnification by the tenant. Oftentimes, some damages are not accidental and are presented that way by the tenant in order to avoid any type of litigation. Therefore, your tenancy agreement must explicitly outline who is entitled to pay for what.

Intentional Damage

Intentional Damage is a homeowner’s worst nightmare because it comes with many nasty surprises that can cost you a lot. Intentional Damage is usually done as an act of vengeance against the landlord. This is one of the most frequently carried-out practices in the USA. Lessees perform vindictive acts of destruction shortly after eviction. These spiteful acts are performed to avenge the eviction. These damages may come in multitudinous forms. From missing appliances and broken doors to spray-painted walls and smashed glasses, you never know what awful surprises are waiting for you. Therefore, running a background check on the tenant before signing the tenancy agreement is important. It can tell you a lot about who you are doing business with.

Tenancy Agreement and Security Deposit

Working out everything with your tenant in the beginning is going to save you a lot of time and energy. You and your tenant have to come to an agreement about who is going to pay for what. Your Tenancy Agreement needs to state everything explicitly so that there are no loopholes. From the amount of money held in a security deposit to the compensation you are entitled to in case of damage that occurs due to the negligence of the tenant, you need to be explicit about everything. All rental agreements have some grey areas and the best you can do to minimize those grey areas is to seek legal advice. Outlining a rental agreement under legal counsel can help you minimize the grey areas that can exonerate your tenant of the responsibility to pay even when the damage is an act of negligence. You need to decide how repairs and replacements will be paid when the period of tenancy is completed.

The tenancy agreement basically serves as evidence that the tenant is acknowledging the current state of your property and takes the responsibility of normal maintenance until the tenancy is terminated. Normal maintenance includes refraining from acts that can cause damage to the property. General wear-and-tear happens and it is not fair to think that your tenant is legally liable to pay for that when the tenancy terminates as such damages are addressed through the money held in a security deposit. Therefore, the period of tenancy and the current state of the property must be taken into consideration before deciding the amount of security deposit. 



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