Tenant Damages – How to Protect Your Rental Property in 3 Easy Steps

Tenant Damages

Cracked tiles, holes in the drywall and broken windows, these are all types of damage that tenants may cause on your rental properties. When this happens, what can you do about it? 

The first thing you need to remember is not to panic, while general wear and tear are natural and expected, most tenants are not going to cause serious damage to your rental properties. After all, why would someone want to damage and destroy their home? 

However, sometimes certain tenants can be careless or destructive and as a result your property winds up in disrepair. So, you need to know how to proceed in this situation. 

That is why we have this handy step-by-step guide to help you navigate what to do if a tenant damages your rental property.

As well, if you would like to continue to expand your real estate investment strategies, we would like to help. That is why we are offering you a free strategy call. All you need to do is click the link below.

Step 1: Communicate with the Tenant 

Before anything else, when tenant damage occurs on your property, you need to communicate with the tenant. 

When Your Tenant Informs You of Damages 

Ideally, the tenant should reach out to you or your property manager as soon as the damage occurs. This way everyone is properly made aware and can begin working towards a solution sooner rather than later. 

If your tenant reaches out to you and informs you of damage on your property, remain calm and ask them what happened. Give them the chance to explain the situation to you. Sometimes accidents happen and you should give your tenants the opportunity to hold themselves accountable for their mistakes. However, while they explain the situation you should be mindful of whether they are holding themselves accountable and giving you an honest explanation, or if they are looking to make excuses and shift blame off of themselves. 

When You Discover Tenant Damages 

Unfortunately, sometimes tenants will cause or discover tenant damage on your property and keep it to themselves or try to cover it up. While this can be frustrating as a property owner, especially if the damages you discover have become worse with time and could have been much more manageable if you were told sooner, you need to keep calm, lashing out is not going to help the situation. 

As they explain the situation make sure you look for honesty and accountability, but you should also remember that they were not up front with you and are only now telling you because you found out. 

Step 2: Assess the Damage 

Once you have communicated with the tenant, it is time to assess the damage. While you are doing this there are three things you should be taking into account. 

First, you need to acknowledge the extent of the tenant damages. Do they impact the quality of living in the unit? Have they impacted the structural integrity of the property? 

Then, you need to get an estimate for how much it will cost to repair everything. This number will be valuable once you move on to the next step. 

Finally, you should attempt to see if you can determine the apparent cause of the damages. Hopefully at this point your tenant will have given you an explanation, so what you need to do next is determine if that explanation accurately describes the tenant damage that you are seeing. For example, if a tenant claims that they fell and accidentally knocked a hole into the wall, but the drywall shows signs of multiple strikes or a greater amount of force, you can determine that they may have lied to you about what actually happened. 

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Step 3: Choose a Course of Action 

At this point it is time for you to decide what will be an appropriate course of action to take with your tenant. There are a few ways that things can go depending on the cause and extent of the damage as well as how forthcoming the tenant may have been with the information. 

Option A: Making the Tenant Pay for The Damages 

Despite the damage caused to your property, it is sometimes still possible to salvage the relationship with your tenant. Perhaps the tenant damage was caused by a genuine mistake or accident, or upon further inspection the tenant was not entirely at fault – in these cases it may not seem fair to punish the tenant by evicting them, especially if they were a good tenant up to this point. 

Instead, you can work out an agreement with them for them to repay you for the tenant damages and potentially assist in the repairs if they are capable. Whatever the agreement may be, make sure that you get it all in writing and have the agreement checked by a lawyer or someone well versed in these sorts of contracts to make sure it is enforceable and outlines consequences if the tenant were to go back on the deal. 

Option B: Evict the Tenant and Make Repairs 

Sometimes the tenant damage is too severe, or the tenant was too negligent or destructive and you cannot allow them to stay. In this case you are completely within your right to pursue an eviction. Just make sure that you are following all of your local eviction guidelines. 

However, it is important to remember that evictions can sometimes be a long and expensive process that does not guarantee you will get back all of the money you are set to lose in repairs, missed rent and legal fees. So, it may also be worth it to offer the tenant an incentive to terminate their own tenancy in order to save you money in the long run instead of spending your time and money on an eviction. 

Reminder: Include a Tenant Damage Clause in Your Lease Agreements 

You should always remember that when you are drafting your lease agreements you need to include a tenant damage clause. This can help protect you and your investments from destructive tenants by outlining clear consequences for tenant damages caused to the property, as well as protect your tenants from being held accountable for damages that are not their fault. 

If you would like to learn more about the world of real estate investment, or are looking to grow your investment portfolio, give us a call at LendCity. You can reach our office at 519-960-0370 or you can find us online at LendCity.ca Alternatively, you can book a free strategy call at the link below.

What To Expect When Dealing With Tenant Rental Damage, With Scott Dillingham