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What is normal wear and tear versus actual property damage caused by tenants?

What is normal wear and tear versus actual property damage caused by tenants?

Hi, I am Jenifer Spencer, Operations Manager with Edmond Premier Real Estate Services. You know, one of the questions we are often asked by owners who invest in real estate as well as by tenants is what exactly is the difference between wear and tear versus damage? What is the life expectancy of a range? Carpet? 

You want to check your local city and state laws to see if they define the difference. Oklahoma does not have a definition of wear and tear versus damage. I look at it in this manner. Normal wear and tear means the deterioration, which occurs based upon the use for which the rental unit is intended, without negligence, carelessness, accident or abuse of the premises or equipment. Now the other thing we really recommend, whether you are managing your property yourself or if you have a property management company managing it for you, is you need to have internal standards. What you do not want to do is taken on a case-by-case basis. You want to have noticeably clear standards. So, for example, normal wear and tear is minor dents or scratches on a wall, small nail holes from hanging pictures, discoloration from sun exposure, chipped/peeling wood varnish or paint, lightly dirtied carpet from standard use, loose tiles/linoleum, or rusted plumbing fixtures. 

What is damage? Damages as it relates to things like holes in walls have also came up. Large holes from hanging shelves, pictures, screws, wall anchors, TV brackets, or other wall hanging art wall hangings that cause larger damage. Other damage examples are cigarette burns in carpet, broken mirrors in bathrooms, visible pet stains, claw marks on wooden floors, filthy or irreparable broken appliances. Let me give you one more example, as it relates to carpet. We get this often from prospective owner clients as well. "Gosh, I think that tenant who moved out of my property should be charged because the carpet was brand new when they moved in and now the carpet is worn." If it is a walkway, and people walk on the carpet and it gets worn through, that is not damage. That is just wear and tear. Now things tenants would potentially be responsible for from a damage standpoint on carpet, would be things we define as torn, burned, stained, missing, ripped, or pet damaged carpet. This is not wear and tear. When you drop the iron on the carpet, and it burns a hole in the carpet, that is going to be considered damage and they are going to be charged for that. 

As the property owner/manager, when you are doing a security deposit return and charging things against your ex-tenant's security deposit, take into consideration the length of their tenancy number one. How long have they lived there as well as the life expectancy of that for which you are charging damages. So, let say your tenant has been in the property for 15 years and that the carpet is ruined. It was brand new when they moved in? Well, they have been there for 15 years, and the life expectancy of the carpet has been exceeded. Therefore, it does not matter how bad the carpet looks at the end of that 15-year occupancy. You are not legally going to be able to charge them anything whether they damage the carpet or not as it relates to carpet because of the life expectancy and consideration of how long they were there. Now this is a fine line to walk and there are opinions on both sides, but as a property manager or as a real estate investor, you want to make sure you have standards. 

We at Edmond Premier can be a reference and are happy to help.  Please reach out to our office and we would be happy to discuss. 

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