How do Property Managers determine what qualifies as “normal wear and tear” in rental units? This is a common question both tenants and owners often ask. The answer is complex and there is typically no easy answer for this. The majority of Denver Property Managers today agree that the vagueness around this topic can be difficult when returning a tenant’s security deposit.
We must first define what “Normal Wear and Tear” means here in Colorado. Security deposits are regulated by Colorado law, Section 38-12-101, et seq., C.R.S. A security deposit, also called a damage deposit, is any advance or deposit of money used to secure the performance of the lease. This deposit may be retained by the landlord for the following: any unpaid rent or utility bills owed by the tenant; payment for damages to the premises beyond “normal wear and tear”; any cleaning the tenant agreed to in the lease; and any other breach of the lease causing financial damage to the landlord. “Normal wear and tear” is defined by Colorado statute to mean “that 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 or chattel by the tenant or members of his household or their invitee or guests”. Examples of normal wear and tear might be worn tracking in the carpet. Examples of things that are not considered “normal wear and tear” are nail holes in the walls, stains on carpets, and mold on grout (via Tenant.net)
How is a landlord to navigate the challenges surrounding “normal wear and tear”? We’ve outlined a few steps that landlords can take to reduce the likelihood of confronting the issue of “normal wear and tear” with a tenant.
Make sure your property is in very good condition before any tenant moves in. Document the initial condition of the unit in writing and with pictures and videos, and have the tenant agree and sign to the condition of the property after they’ve also conducted their own walkthrough inspection of the rental unit.
Be realistic and honest about the condition of your property. Is the flooring in new and good condition? Or is the quality bare minimum? Plan to accept what items will not stand up to tenant charges when they move out, such as stained or worn-out carpets. Since carpet typically shows more wear than hardwood floor, it’s important to know that carpet needs to be replaced every 7 years per The Department of Housing and Urban Development.
When a tenant moves out, consider the length of their stay. The amount of wear and tear that you will be left with will differ greatly, depending on if the tenant signed a 6 years lease or a 1 year lease. If the tenant has occupied the property for a longer lease term, then the costs of maintenance and repair will likely be higher when they move out. Additionally, the types of damage that come from normal wear and tear will be different for tenants who occupied a space for a longer period of time.
Identify the problems that are true “damage”. Normal wear and tear – such as heavy soil, stains – is not just dirt or filth. “Normal wear and tear” also does not cover negligence, such as mildew collecting on walls, or failure to report a leaky sink that caused mold or other damage. It does not apply to abusive use of utilities either.
Use common sense – more often than not, it is not worth going to court to fight over, say, carpet cleaning when the tenant has been in the property for a while.
The best thing a landlord can do to tell the difference between “normal wear and tear”, and tenant-liable damage, is to look for the types of wear and tear that arise repeatedly over time, across different tenants. This damage is most likely going to be “normal”, and thus, not liable to the tenant. Damage that arises sporadically is more likely to be tenant-liable. If a landlord does come across some damage that looks suspect or significant, it is always best for them to communicate with their tenant through their landlord, before taking the situation to court.
Be sure to always make sure your lease is clear and transparent, and that your tenant understands what normal wear and tear is versus damage. Security deposits can be tricky, so if you’re a tenant, make sure you know how best to ensure you get your security deposit back.
Contact Keyrenter today for advice on how to handle security deposits