~ As a Landlord, there are the usual expenses in cash flowing a property which is the cost of doing business. From the time the home is acquired until it’s rented, costs include acquisition costs to restoring habitability to updating, depending upon the overall objective of the landlord, and different levels of updating that may be desired. Providing a safe and habitable abode is the goal to obtain and keep long-term tenants. Once the tenant is placed, ordinary wear and tear is a landlord expense. Damage or excessive filth isn’t.
A habitable structure is a safe structure that has met minimum building codes, and can be occupied in reasonable comfort. Although standards vary by region, the premises should be closed-in against the weather, provide running water, access to decent toilets and bathing facilities, disposal of wastewater, provide heating, and electricity. Particularly in multi-dwelling buildings freedom from noxious smells, noise and garbage are included in the standard. (http://legal-dictionary.thefreedictionary.com/habitable)
So, once the property meets the definition of habitable structure, what is ordinary wear and tear, and what is damage?
Ordinary Wear and Tear (OWT) and Landlord Responsibility VS Damage or Excessive Filth, the Tenant’s Responsibility:
1. Moderately worn carpet, vinyl and tile is OWT; burns, holes, breaks or stains is Damage
2. Small holes from hanging pictures, OWT; numerous or large holes from hanging shelves, accidents or carelessness is Damage
3. Dents in wall from door handle, OWT; Door off hinges or missing handles or hardware is Damage
4. Faded Paint is OWT; stains, drawings or unapproved painting is Damage
5. Burned out oven heating elements is OWT; Burned out oven heating elements caused by food debris catching fire is Damage
6. Warn gaskets on refrigerator doors is OWT; Broken refrigerator component or shelf is Damage
7. Moderate dark patches of soil on reasonably worn hardwood floors, OWT; water stains is Damage
8. Warped cabinet doors is OWT; Sticky cabinets and interiors is Damage
9. Moderately dirty mini-blinds, OWT; missing, stained or broken mini-blinds is Damage
10. Cigarette smoke residue or fumes is Damage
11. Garbage disposal that quits operating due to motor dying, OWT; Garbage disposal that breaks a because of a foreign object lodged inside is Damage
12. Laminate top separated from countertop base, OWT; Burns, chips and breaks is Damage
13. Loose door handles is OWT; missing or broken door handles is Damage
14. Failed toilet parts, but no cracks in the toilet or stoppages or blockages is OWT; cracked, breaks or problems caused by flushing foreign objects is Damage
15. Loose faucet handles is OWT; broken faucet handles or missing drain plug or other parts is Damage
16. Some electrical issues may be OWT; electrical damage caused by overloading the circuits or other tenant activity is Damage
17. Worn out switches, OWT; broken or missing switches is Damage18. Loose deck or fence components, OWT; Broken deck or fence pieces or parts is Damage
19. Loose stair banister or handrail, OWT; missing stair parts is Damage
20. HVAC concerns related to age of unit, OWT; problems caused by dirty or missing filters or abuse or misuse is Damage
21. Animal droppings left in the yard, and damage to landscaping by animal droppings or urine is Damage.
~ This list is by no means a complete and comprehensive list. Based on what features are included in a home, there may be other items to consider. Ordinary wear and tear should not be charged to the tenant or deducted from the security deposit. Damages should be charged to the tenant or deducted from the security deposit.
Feel free to share this list with your tenants and your preferred Maintenance Professional so that everyone is aware of what is and isn’t covered by the landlord.
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Chrystal Safari Roy has over 20 years experience in personal property management and residential real estate sales and is a licensed REALTOR® in North and South Carolina. As a MASTERS Designation holder, she is a specialist in New Construction, Finance, Marketing, Objection Handling, Relocation, Technology, and is a multi-million dollar producer. Chrystal is a member in good standing of the Charlotte Regional Association of REALTORS®, North Carolina Association of REALTORS®, and National Association of REALTORS®.