Laminate Flooring Depreciation

[Justin Wallman]

Does anyone depreciate laminate flooring in the event you have to replace some or all of the flooring when a tenant vacates? Similarly to carpet? Maybe a life expectancy when a new tenant moves in?

In other words, the flooring suffered some damage (in which you charged other tenants in the past) but didn’t necessarily replace. Then, finally the last tenant did it in. Now we have to replace all the flooring.

How do you charge that existing tenant? Yes, they contributed to additional damage but shouldn’t be responsible for all the flooring.

Thanks in advance!

[Nathan Gesner]

Quote from @Justin Wallman:

Does anyone depreciate laminate flooring in the event you have to replace some or all of the flooring when a tenant vacates? 

Yes. Everything has a life span and depreciates in value over time. There's some simple math involved, but you can also tweak the math based on reality.

Example: floor is brand new and cost $4.50 per square foot, including installation. Life span for this flooring is 15 years. Tenant lives there for three years and destroys 200 square feet of flooring. 200 x $4.50 = $900. The floor is three years old, so you have to depreciate value for those three years. $900 divided by 15 years = $60 depreciation per year or $180 because it's three years old.

You talk to an installer and he says prices have gone up and it will cost $6.50 per foot to replace. 200 x $6.50 = $1,300. Depreciate that over 15 years and you get $86.67 per year or $260.01 for three years.

$1,039.99 (I would round it to $1,040) is a fair price based on replacement cost minus depreciation.

Some courts only let you depreciate the original purchase price, not the replacement cost. I recommend you always ask for the higher amount and the court will tell you if you need to reduce the charges. It's rare that you'll ever make it to court, especially if you document with pictures before/after each tenant.

There's more to consider as you gain experience, but this is an easily justifiable model to follow.