Normal Wear and Tear for Rental Properties: A Landlord’s Guide

Normal wear and tear is damage that naturally occurs in an investment property due to aging. It typically results from a tenant living in the property and is considered normal depreciation. It’s not caused by neglect or abuse of the property. Landlords need to fix normal wear and tear but aren’t required to fix tenant caused damage.

Normal Wear and Tear vs Damage

Normal wear and tear is different than tenant caused damage. Normal wear and tear occurs naturally over time. Damage caused by tenants isn’t a result of aging but is a result of negligence, carelessness or abuse. Normal wear and tear is required to be paid for by the landlord and tenant damage is not.

In the table below we will illustrate examples of types of normal wear and tear and tenant caused damage and the differences between the two.

Differences Between Normal Wear and Tear vs Damage

A landlord checklist can help you figure out what’s normal wear and tear vs damage by forcing you to document all of the above. For a better understanding of the difference between the two (and when you can deduct the tenant’s deposit), let’s take a look at the two most common examples, which are normal wear and tear vs damaged carpet and normal wear and tear vs damaged paint.

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Normal Wear and Tear vs Damaged Carpet

If the carpet has been in place for 5 years or longer, it’s the landlord’s responsibility to replace it, since that is the length of the carpet’s useful life. If the carpet has light sun damage or is showing signs of wear, that is normal wear and tear and the landlord cannot blame the tenant.

It’s the landlord’s responsibility to keep the property free of hazards. So, if the carpet has worn out over the years and become a trip hazard, it should be immediately replaced and paid for by the landlord. But, if the carpet has been ripped or has excessive fraying, it’s the tenant’s fault and the cost to replace it can be deducted from the tenant’s security deposit.

Further, if the carpet is stained either by a pet or spilling food, wine, dirt, and more, it’s considered tenant-caused damage and can also be deducted from the security deposit. State laws vary on landlord tenant laws regarding security deposits but generally, the landlord needs to get a repair quote from a licensed contractor and send the tenant an itemized list of the damage along with the check for the remainder of the security deposit.

Normal Wear and Tear vs Damaged Paint

Peeling paint, sun damage or a small number of scuffs are considered normal wear and tear and the landlord should touch them up between tenants. Ceiling paint usually lasts longer since no one is constantly touching the ceiling. Ceiling paint should be touched up when a leak occurs or on an as-needed basis.

If the paint has holes in it, excessive scuff marks or other marks such as drawings or scribbles, it is considered damage caused by a tenant. In this case, the cost to fix the damage and paint the walls will be deducted from the tenant’s security deposit. You can do this by getting a quote from a licensed contractor and sending the tenant an itemized list of the damage, along with the check for the rest of their security deposit.

“The easiest way to discern between wear and tear and tenant caused damage is to think of wear and tear as any damage that’s caused by natural forces or damage that’s caused by daily use. Tenant caused damage should be thought of as damage requiring more than routine maintenance to repair. Obviously, this doesn’t include things like a leaky pipe or things that would happen to the property regardless of who the tenant was.”

– Timothy Czekaj, Real Estate Attorney, Czekaj Dusharm LLC

As a landlord, there’s a lot to deal with including tenant-caused damage and related issues. If you’re a new real estate investor or just have questions about being a landlord, check out our 26 tips for landlords.

How to Deduct Expenses from a Security Deposit

Landlords collect security deposits at the beginning of a tenant’s residency. These security deposits help protect the landlord from having to pay for expenses that go above and beyond normal wear and tear. Landlords are allowed to deduct certain tenant-caused expenses from security deposits.

The laws on security deposits vary by state. However, typically, landlords must return a tenant’s security deposit and send them any accounting records within 21 days from the time the tenant moves out. This means that within 21 days, you must get a contractor’s bid to repair tenant caused damage, subtract it from the security deposit, and mail the tenants the itemized deductions and a check for the difference between the deposit and the cost of the damage.

In most states, an itemized deduction list can be used in place of a contractor’s bid, but it’s better to be safe by using a contractor. Other deductions can include unpaid utilities and overdue rent, but you only need proof of the bill and not a contractor’s bid. If the landlord doesn’t send the full list of itemized deductions to the tenants within the stated time period the tenant can take them to small claims court.

If the tenant’s security deposit does not cover all of the tenant caused damage, the landlord can take the tenant to small claims court. However, this can be costly and time-consuming. If the damage exceeds small claims court guidelines, the landlord hires an attorney and sues the tenant in municipal court. This can be even more costly and time-consuming, and it may be difficult to enforce a judgment against the tenant.

Here’s an example to better understand security deposits and deductions:

Example of Security Deposit Deductions

“In most states, laws give benefit of the doubt to the tenants and it’s up to the landlord to prove that damage was done intentionally and isn’t just normal wear and tear. The longer a tenant lives in a property, the more leeway they have since more time has elapsed for normal wear and tear to occur.

As a landlord, you have to be confident that you can convince a judge that there is reason to subtract a deduction from the tenant’s security deposit. This damage is limited to willful or negligent acts including holes in the wall, damage from pets, abuse and damage occurring from illegal acts.”

– Sotereas Pantazes, Landlord & Founder, EFynch

How to Avoid Landlord Tenant Disputes

Disputes over normal wear and tear and tenant caused damage can result in legal action. To avoid this, all tenant expectations should be in writing and included in the lease so the tenant is aware of them. These expectations include things such as who is responsible for cutting the grass, snow removal and common area maintenance.

“The precautions a landlord can take is to be vigilant in the move in inspection. During the tenancy, the landlord should do (at minimum) annual inspections to assess the rate of wear and tear, while also discovering any tenant damages. Security deposit guidelines should be outlined in the lease and/or lease addendums. It should be more than clear to the tenant what is expected of them and what condition the landlord expects to receive the unit in, at the time of move out.”

– Jake Michels, Director of Property Management, RUPCO

If the tenant violates any terms of the lease, including not paying rent or damaging the property, it may be time to file an eviction. Since evictions can be time-consuming and costly, an alternative is paying the tenant to leave the property. This is called cash for keys. The tenant is required to leave within a short time period and will receive cash for returning their keys and not further damaging the property.

A landlord should be prepared to go to court if the tenant denies the property damage claims. In court, a judge may ask the landlord for proof of correspondence, including how the tenant was notified of the security deposit deductions. This is why it’s important to use certified mail when you send your contractor bids, itemized deductions, and more so it can be tracked.

The judge may also ask to see proof of where the security deposit was kept and a copy of the lease. Use a separate business bank account to keep security deposits separate from other property related expenses. This makes it easier to keep funds separate and not commingle anything.

In the next section, we show you how to document normal wear and tear vs damage in 4 steps. This should be useful in the event you go to court over tenant damage. For more helpful landlord advice, including understanding landlord-tenant laws, check out our in-depth guide on how to become a landlord.

How to Document Wear and Tear vs Damage

When documenting wear and tear vs. damage, it’s important to conduct a move-in and move-out walk-through with each tenant. Catalog any differences. This will help you identify what you’re responsible to pay and fix asap. You will also know what is the tenant’s responsibility and will then be able to deduct it from their security deposit.

Here are the 4 steps to document wear and tear vs. damage:

Step 1. Conduct Landlord Tenant Move in Checklist

Print out our landlord-tenant move in checklist and go through each room of the property with the tenant and the checklist in hand. Document the current condition and photograph each area. Remember to include all appliances and outdoor areas of the property.

Step 2. Conduct Regular Maintenance

A landlord should conduct regular inspections of the property. This will keep them up to date on the current property condition, as well as what needs to be fixed immediately. By conducting routine inspections you will show the tenant you care about the property and expect them to as well. You will be able to keep track of wear and tear and will be able to note tenant caused damage during each inspection.

Step 3. Respond to Tenant Requests

By responding to tenant requests you will show the tenant that maintenance is being done in a timely fashion and thus rent should also be paid in a timely fashion. Responding to tenant’s requests in a timely manner also helps you stay on top of potential problems. If you fix an issue when it arises it’s less expensive than if the issue gets worse. It’ll also help you avoid situations of tenant-caused damage before they arise.

Step 4. Conduct Landlord Tenant Move Out Checklist

After the tenant completely moves out it’s time to conduct a move out checklist. This checklist will include notes on the property’s current condition. You will go room by room and notate any damage and photograph each area as well.

While you fill out this checklist, look at the move in checklist to see what condition the property was in before the tenant moved in. This will give you an idea of who’s responsible for the damage. If the tenant caused the damage, then the cost to fix it can be deducted from their security deposit.

Bottom Line

Now you know what normal wear and tear is and the difference between normal wear and tear and damage caused by tenants. Normal wear and tear is important to a landlord since it affects the landlord-tenant relationship and can cost the landlord money if not properly documented.