Should messy guests pay when next vacation rental tenants walk away?

Rent it Right

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Sep. 29, 2011

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Rent it Right

Janet Portman
Inman News™

Q: I rent my vacation home to weekenders and weeklong residents on a regular basis. I collect a $250 deposit and allot five hours for cleaning between guest stays. Last month, the departing guests left the place so dirty and messy that the cleaners couldn't finish in time. When the new guests arrived, it wasn't done and they left, refusing to pay any rent. Can I sue the departed tenants for that lost rent? --John C.

A: Whether you can sue your messy guests depends on what your lease says about the security deposit.

If you've drafted a lease that has your interests in mind, the security deposit clause should explicitly say that the deposit will be used to cover unpaid rent and any damage or cleaning beyond normal wear and tear, and to replace damaged or missing items. It should also say that your remedies for such problems will not be limited to the security deposit.

In other words, residents should be on notice that if their use results in expenses that exceed the deposit, you can pursue them for payment -- in court, if necessary. (Not having a clause that reserves your right to "pursue other remedies" won't necessarily preclude you from doing so, but its absence might cause a problem.)

Your lease clause should also specify that guests will be responsible not only for damages that are the direct result of their activities during their stay, but for "consequential" damages as well. Read on to understand why that last bit can be important.

Even if your clause makes it clear that your guests will be held responsible for costs that exceed the deposit, you're not yet assured of a win. Your question concerns not just cleaning or damages, but a more indirect consequence of the first tenants' behavior: the refusal of the next guest to take the rental when your cleaning crew couldn't finish their job within the five hours that you allotted.

The tight turnaround time you set up, or the crew's slow progress, or both, could be issues a judge would focus on, instead of the messy condition of the unit in the first place. If that were to happen, you might not be successful.

In legalese, the short window or the slow cleaning crew is known as an intervening cause, which the original guests are not responsible for and could not anticipate. A judge might decide that it's unreasonable for you to think that cleaning can always be accomplished in five hours; or the judge might think that if the time period is going to be so short, you need to make sure that there are enough people and equipment to get a difficult job done right.

If the legal analysis goes in this direction, you may lose your bid to make the departing tenants cover the rent you lost when the new folks walked out.

Q: We have a lease for part of a commercial building, for our motorcycle shop. It was set to begin this month, but the inspectors have just notified us and the landlord that we cannot open until we do some work -- making a bathroom wheelchair-accessible, removing a wall with asbestos, installing a sprinkler system, and installing a new exterior door. The landlord is demanding that we pay for all of this. Must we? --Jane and Peter D.

 

A: Finding out who should pay for all of this work will depend, first, on what your lease says. A well-drafted lease will address issues such as Americans with Disabilities Act (ADA) compliance, building systems (such as sprinklers), and handling environmental issues such as asbestos-containing walls. I'm guessing that the new exterior door is a fire code compliance issue; this, too, is often covered in the lease.

But alas, many leases don't mention these issues. When that happens, judges use a rule of thumb to decide who should do the work: When the improvements will benefit tenants in general (such as future tenants), and not just the current tenant, the work is often considered a capital improvement, which landlords typically pay for.

On the other hand, if the work is necessitated as a result of the current tenant's business, the current tenant is often told to pay for it. Common sense underlies these rules: Capital improvements will last and benefit succeeding tenants, and will allow the landlord to charge appropriate rents to cover their cost. An improvement or alteration that benefits the current tenant only, however, will be of no use to the landlord once the tenant leaves.

For an example of a short-term, this-tenant-only improvement, consider code requirements that are triggered when tenants run particular kinds of businesses, such as a printing business. Ventilation will be important; but unless the space is uniquely configured for printers only, and only printers will likely be successive tenants, the landlord won't be particularly interested in paying for a system that will be superfluous once the current renter leaves.

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