Understanding the coverage of tenant damage

[Timothy W.]

When I was a property adjuster on the south side of Chicago over half of the propertites I dealt with were landlord owned. There's one particular scenario I saw a lot and wanted to give folks a heads up on what it is they are dealing with.

You've rented the property and come back after the tenant has left or been evicted. Lo and behold, the property is a mess. There's writing on the wall, holes punched in the walls, the carpet is filthy, there are fixtures broken, door handles loose and now some appliances aren't working - obviously from being manhandled during use.

You have insurance so you file a claim for vandalism. Here's the issue. Generally vandalism is damage that is caused with malicious intent (check your policy definitions). Damage such as holes in wall, cigarette burns in the carpet - were these damages that were done with malicious intents? You could certainly make a case for that. What about the kids writing on the walls in crayon? Is that "malicious"? The house is filthy....but was that "malicious" or simply tenants living in an unclean manner? What about those appliances that were working before but now are damaged? Yeah they may be damaged, but were they intentionally damaged with malicious intent or damaged by "hard living"? What about all the garbage they left in the house? Again....just because a person had a cluttered house, does that mean they cluttered the house maliciously?

One thing you have to bear in mind when dealing with tenant damage is that tenants in general have a tendency to "beat up" property through their natural course of living there. Sometimes damages are truly made with a malicious intent....sometimes they are not. This is something you must be prepared for if you are going to file a claim and calculate your cost of repairs. I had a situation where a person received a cleaning and repair estimate of $40,000....though only $17,000 of the damage was determined to be intentionally malicious. Frankly I held a dubious view of this estimate but regardless my point is that less than half of the damage to the property could truly be determined to be vandalism.

This may not be something you want to hear, but it is something you need to be aware of when you are screening your tenants. Yes you may have a property insured but you must be aware that the coverage is for exactly what is stipulated in your policy.

Tim