Interior damage caused by current tenant - Renew lease or not?

Question

The time has come for an annual lease renewal on one of our SFH rentals. We contact the tenants and they are interested in renewing with one request. They want the interior main floor repainted. They have been in the property for four years. We send our contractor over to quote the project and he reports issues of damage. Their dog ($400 pet deposit) has chewed and clawed through multiple portions of walls and door frames. And they have apparently allowed water intrusion to remain under portions of our LVT flooring for a period of months. The quote comes in at $4,850 to get the property back into acceptable condition without all of the trim and door repairs/replacement.

Do you pay the ~$5,000 and renew the lease for tenants that pay on time or start fresh (with repairs and finding a new tenant)?

Thanks.

Do you pay the ~$5,000 and renew the lease for tenants that pay on time or start fresh (with repairs and finding a new tenant)?

Thanks.

Orrett Lawrence · Answer

I would have a talk with the tenant(s) about the damages that are beyond the normal wears and tears. If they are willing to pay for damages (the excessive Ws&Ts), I would renew the lease.  If they don't take responsibility for the damages, then I would not renew the lease.

Kevin Sobilo · Answer

@Phil B., you didn't mention how the water intrusion issue was tenant caused damage? Did the tenant cause the water leak by breaking something? Did the tenant see and know about a water issue and fail to report it in a timely manner?

Just because a water issue happened doesn't mean its tenant damage there needs to be more to it before that determination can be made.

If the tenant pays for the damage, I probably renew the lease. Anyone who stands up to their responsibility is a decent tenant. I may however discuss collecting for the pet damage now but not fixing those items until they move out to avoid them having to repair the same items again since the pet damage is likely to reoccur.

Phil B. · Answer

Thank you for responding. The water was caused by a rotten sill, which I will certainly replace.  I just don’t understand why they would allow water to sit in the obviously warping floor for months.  The painting of the floor and increasing the rent are both great ideas.  Thank you.

Nathan Gesner · Answer

No offense to the other posters, but this is all terrible advice.

Terminate the lease and get rid of these tenants!!!

You should never renew a tenant that damages your rental, is problematic with payments, violates the lease, etc. There are plenty of good renters out there.

This tenant caused at least $5,000 in damages. Get them out, make the repairs, charge them for the repairs, and then find a good tenant who will treat your property with respect.

Inspect your property at least once a year. I'm willing to bet they caused this damage over a period of time, not just the last six months. If tenants cause damage, give them a written notice and demand they repair it within 14 - 30 days. Inspect to verify it's done to your satisfaction. If they fail, terminate. Even if they are successful, I may not renew their lease.

If you don't know how to manage your property well, you will lose thousands, tens of thousands, or even hundreds of thousands over the life of an investment.

Ned J. · Answer

Current damage that exceeds normal wear and tear, needs to be paid for in full now if they want to renew the lease. That way the deposit is still in effect for damage when they move out some day. If they are unwilling to do that, then do no renew the lease.

The water damage is a bit more tricky...since its a defect in the unit that created it, and they just did a shitty job of reporting it, then its harder to stick them with the bill. Hard to prove in court and make it stick.... regular inspections on your part may have avoided it or limited the full extent of the damage. So you may have to eat that aspect.

Increase the deposit for the pet as part of the renewal.....and dont fix the current damage until they move out, or you will just fix it again. You may have to fix holes in walls to do the paint, but I would not do door jambs, baseboard or other stuff that is not required to paint.

Phil B. · Answer

Thank you for this input.  This sounds like a logical path forward.

Theresa Harris · Answer

I'm assuming for the water damage, something spilled and they didn't mop it up or they had the dogs water bowl on the floor and water go onto the floor and wasn't cleaned up-if either of those are the case, then I'd explain that to them.

If the floor is damaged and eventually needs to be replaced, I would not replace it if they are going to stay there.  Paint the floor, but tell them it is due to their dog and charge them to paint the floor.  Give them a day one which it is going to be done and tell them the floor needs to be clean and all the furniture removed from it-plus they can't walk on it for a set period of time until the floor is dry-probably a day or two.

I'd also make sure you increase their rent because my guess is when it comes to replacing the floor AFTER they move out, you aren't going to recoup what you expect from them.  You can only charge them for the life that is left in the floor.  So if the flooring is expected to last for 10 years (I don't know the number) and they were there for 4 years and now it has to be replaced, you can charge them for 60% of the replacement cost.

Interior damage caused by current tenant - Renew lease or not?

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