Damage: the one word you don’t want to hear when renting out your property.
Understandably, 28% of property owners we surveyed said that property damage was one of their biggest fears when it comes to leasing their property.
But the truth is, rental properties don’t stay in the same condition forever, and damage can occur even with the best of tenants. In saying that, there is a fine line between natural wear and tear and damage to property by the tenant.
In the event that there is damage to your rental property - perhaps there are holes in the walls, torn up carpets, or growing mould - it can be hard to determine who is liable for repairs and costs without it turning into a he-said-she-said situation.
To give you clarity on this, we’ve created a step-by-step guide on how to handle damage to rental property by the tenant, making sure you understand exactly what to do and what your (and your tenants’) obligations are. Should a dispute arise, you’ll know exactly how to handle it, identify who is responsible, and safeguard your property from damage in the future.
1. Find out if it’s wear and tear or property damage
First and foremost, it’s crucial to determine whether the damage is wear and tear or actual property damage, as this will decide who is liable for repairs.
So, what’s the difference between wear and tear and property damage?
Fair wear and tear is the natural deterioration that is expected to be seen in a property over time. For example:
- Faded curtains
- Worn carpets
- Minor scuffs and scrapes on walls
- Chipped paint
- Rusting gutters from rain
These are all things that are extremely difficult, if not impossible, to avoid over a long period of time. Therefore, as a landlord, it would be unreasonable to expect tenants to cover the costs of repairs in these instances.
On the flip side, if the rental damage includes things like:
- Broken windows
- Broken or missing locks
- Burns or cuts on countertops
- Unapproved tenant paint job
- Urine or pet odour throughout the property
Your tenant absolutely becomes liable for costs, as these are instances of abuse or neglect of your property rather than fair wear and tear.
2. Identify who is responsible for repairs
As a general rule, the person who causes damage is usually the one who is responsible for fixing it. But, it’s not always straightforward determining who is responsible.
This is where your rock-solid entry condition report comes into play – it’s incredibly useful for avoiding or settling disputes over rental damage.
If your tenant is claiming that the damage didn’t happen under their tenancy, your next step will be to check the entry condition report to see if the damage was there when the tenant moved in.
In instances where there isn’t fair wear and tear damage, but also not damages caused by the tenant, this becomes your responsibility as the owner. This includes things like:
- Structural repairs
- Electrical wiring
- Damage from natural disasters
Tip: You can also check your tenancy agreement as it should detail what is considered reasonable wear and tear and who is responsible – so when in doubt, you can refer to this.
Deduction of rental bond
Provided your tenant is the one responsible for repairs, regardless of whether the damage was accidental, deliberate, or malicious, landlords have certain rights which usually come in the form of financial repayment.
So, if you spot anything you believe was tenant damage rather than fair wear and tear, your tenant is the one responsible for repairs. If they’re reluctant to claim responsibility, you can deduct the cost of repairs from their bond (provided you have all the necessary evidence).
3. Organise a repair
Once you have identified the type of damage to your property and who is responsible, the next step is to organise a repair – and the Residential Tenancies Amendment Act 2018 is quite specific on how repairs should be handled.
If the tenant offers to do it themselves, they need to get your permission and have 14 days to complete repairs. As it is now tenant duty to mitigate damages, you can apply to the Tenancy Tribunal for a mediation if they don’t comply.
But if the damage is more severe and you need to organise a tradesperson to take a look, doing some research online to find a reputable vendor is the best way to go about it.
We know that it can be quite difficult to tell whether you’re paying a fair price, so we can help by estimating your maintenance costs to see if it’s a fair quote you’re getting. You can also refer to our property maintenance price list for an overview of what the most common repairs and services cost.
Once this has been organised, you’ll need to give your tenant a hard copy of the quote and receipts to prove how much was spent and on what, as you’ll be deducting the cost from their rental bond (if they are liable).
Remember: If you aren’t sure where to start with organising a repair, your property manager can handle all of this for you as it is one of their main duties and responsibilities.
4. Notify your tenant when you have arranged for a fix
Once you’ve organised repairs to be completed, you’ll need to notify your tenant when access to the property is required. How much notice you need to give to your tenant will depend on if the damage is classified as non-urgent or urgent.
If it’s an urgent repair, you’ll need to give them at least 24 hours’ notice and have it fixed in 24-48 hours. These include things that may affect the health or safety of residents, such as:
- A leaking roof or pipes
- Damage to the heating system
- Electrical concerns
- Damaged locks and/or security alarms
Non-urgent repairs are a bit different and should be at least two days written notice, but can be fixed within 14 days. These include things like:
- A broken cupboard or drawer
- A cracked window
- Carpet repair
If the tenant isn’t home, you need to make sure your tenant is comfortable giving access to the property while they are not there to complete the repairs.
This step is crucial because any unapproved or unannounced visits could land you in some serious legal trouble, as by law, you’re required to give notice before entering the property – regardless of the reason.
5. Verify the damage has been fixed properly
Hopefully, any damage to rental property by the tenant has been addressed by this point, but you should follow up with the tenant in a few weeks’ time to make sure the issue has been fully fixed.
Promptly responding to maintenance and repairs is one thing, but being proactive and checking in on your tenants afterwards will make them feel like their needs are really being looked after. After all, a happy, long-lasting tenant is exactly what you want.
If the damage is something you’re still concerned about, you can organise a property inspection so you can verify it has all been fixed properly (and there is no further damage).
But, bear in mind that a property inspection can only happen a certain amount of times a year, where you’ll need to give enough notice:
What if you’ve identified your tenant as the one responsible for damages, but they refuse?
If you are in the unfortunate situation of saying to yourself, “my tenant has damaged my property but won’t take responsibility, what do I do?” you can bring the case to the Tribunal, who will act as the mediator.
The Tribunal will be there to hold the tenant accountable if you’re able to prove the tenant is liable for damage – for instance, by showing that they had breached the tenancy agreement or proving the damage wasn’t there when they moved in.
Similarly, in the unpleasant event of dealing with illegal or criminal damage to property by a tenant, you might need to take more serious action. Yes, we’re talking about suing tenants for damages or even evicting tenants.
Before you ask yourself how to evict tenants, it is important to understand your rights and your respective state’s laws when it comes to damage to property by the tenant:
As both you and your tenant have a legal duty to uphold your ends of the tenancy agreement, if your tenant is causing damage to your property, breaching the agreement, or causing unreasonable maintenance issues, you are absolutely in your right to evict them.
Even though these measures are a bit extreme, it’s important to cover all grounds by knowing your rights, should you find yourself asking what to do if a tenant damages your property and won’t take responsibility.
Take steps to safeguard your property from future damage
As we mentioned, damage can occur even with the best of tenants, but by taking pre-emptive steps and measures, you can safeguard your property from any worse damage in the future. Most importantly:
- You can use our tenant selection guide to help you secure a good tenant
- Take a rental bond (the best and safest way to guarantee financial repayment)
- Build and maintain a healthy relationship for happy, long-term tenants
- Ensure your landlord insurance covers tenant damage
- Have a detailed tenancy agreement
- Have a detailed entry condition report
- Conduct thorough tenant screening
- Have frequent property inspections
Having a completely bulletproof way of preventing damages in your rental property is never guaranteed, but you’re much more likely to minimise them in the future with these steps.
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