'One size fits all' fee for rental damage?

Some fear unintended consequences by imposing 'expected lifespans' on furnishings

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Dec. 30, 2010

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Some fear unintended consequences by imposing 'expected lifespans' on furnishings

Robert Griswold
Inman News™

Q: The couple renting my home moved out last month, and their 3-year-old destroyed the mini-blinds. Is that considered normal or routine? The carpet is also damaged beyond any good cleaning.

Both blinds and carpet were new in 1999. I lived in the rental for the first six years, and it was rented to a second tenant for one year after that. The most recent couple moved in at the beginning of 2006 so they had been renting the home for nearly five years. What is reasonable to charge them for the mini-blinds and carpet?

I have heard that some landlords just have set schedules for charges or deductions from security deposits. I would like to know your opinion on the pros and cons of that practice.

A: Many rental property owners and management companies attempt to establish fixed guidelines about the expected lifespan of various components of their rental properties. This certainly has some appeal, as it simplifies the move-out process and accounting for the security deposit.

Theoretically, a tenant can even be given a spreadsheet in advance that will tell them what charges they can expect. That can certainly take some of the tension and negotiation out of the move-out process and it might even motivate some tenants to stay longer so that they are assured that certain items have been "fully amortized."

But the problem is that there are so many variables that a "one size fits all" approach rarely works. For example, there is a wide spectrum of quality differences in carpeting. Some carpet does not even meet basic FHA minimum standards and certainly cannot be expected to last under even modest use for five years. Then a rental property (especially an upscale single-family rental home) may have upgraded carpet and pad that with reasonable use and regular cleaning will last 12 years or longer.

Another little known fact is the lifespan of even a low-grade carpet can be significantly extended with the use of high-grade carpet pad. So it is difficult for a landlord or property manager with multiple properties and all different types and grades of carpeting and padding to set "standard or expected lifespans." In one rental property, the carpet might be expected to last five years under reasonable use while another could be seven or eight years. Then I have seen some rental properties where the carpet is still looking great after 15 years, although that is extremely unusual!

I would also be concerned that using standardized life expectancy schedules for carpeting and window coverings and similar items could lead to unintended consequences. For example, a tenant who has stayed past the time that they will be charged for certain items like painting and carpet will suddenly develop the dreaded "I don't care" attitude and not treat the property properly.

It is easy to imagine that if a landlord or property manager has a five-year lifespan for carpets that a tenant hosting a party might not be so concerned about spills and stains on the carpet. Maybe the children will be allowed to creatively paint their own bedroom walls since there will be no charge or deduction to repaint back to a basic neutral color upon move-out. I am sure you get the idea.

So you need to first determine the quality of the mini-blinds and the carpet that were installed in your new home in 1999 and are still in use even after two tenants. Unless they were extremely high-end upgrades, I would anticipate that you will determine that the carpet has reached its useful life after 11 years and three different occupants. The mini-blinds are also an item with a relatively long life and should hold up pretty well under most reasonable use.

In your case, the recent tenant's 3-year-old destroyed the mini-blinds so you could make a case that this is damage that is beyond normal wear and tear. But personally, I would be delighted that I got 11 years of good use out of the mini blinds and this tenant was there for four years. I wouldn't charge them for either the carpet or the mini-blinds.

Even if they were miraculously still in serviceable condition, it probably wouldn't be a bad idea to replace the carpet and the mini-blinds just to make the home more desirable to a qualified renter. The rental market continues to be weak in many parts of the country, and it certainly is important to make sure your vacant rental unit gets rented right away by a qualified tenant who will be looking to make it their home for the next four years like your last tenant.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and "Property Management Kit for Dummies" and co-author of "Real Estate Investing for Dummies."

E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com. Questions should be brief and cannot be answered individually.

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