Tenants Damaged Your LIHTC Property: What Now?

The last thing any landlord wants is damage to their affordable housing property. As a landlord, you must have put a lot of time, money, and effort into your rental business and tenant screening. Despite your best efforts, you may still end up getting tenants who cause property damage by accident or on purpose. Property damage can cost a lot of money, and it may also delay the process of a new tenant moving into the property.

What can you do if a tenant damages your affordable housing property?

Document all damage

The first step you need to take to manage tenant damage is keeping a solid record of all damages to your property. As a property owner, documenting all apartment damage can be immensely helpful. Say the apartment destruction is such that you need to go to the small claims court. In that case, you will have evidence of all resident damage on file.

Documenting all property damage also makes it easier for you to calculate the total cost of the damage. You can deduct the same from the security deposit. Also, if the tenant disagrees with the amount you are deducting, you will have solid proof of the damages.

It is a good practice to take pictures of your property before a tenant moves in. The pictures will act as a visual record of the condition of your affordable housing property before the tenant moves in. It will also become easier for you to identify any damage that the tenant may have caused during their stay on your property.

Get estimates for the repair

Normal wear and tear are unavoidable on any property. However, if the damage is beyond that, it could cause your property to be off the market for many days. If you want to avoid such a situation, you should act fast and ask contractors or repair professionals for an estimate for the damage repair. To ensure that you get a fair quote, ask around and get multiple quotes. Having multiple bids will also help you determine the timeline of the repairs. You will also be able to identify the difference between the repair details of various contractors. You will find that some contractors would provide more information and details about the repairs.

It is always recommended to use reputed contractors for quality repairs. Pick a contractor that you are confident will do a good job in a timely manner and at a reasonable cost.

Talk to your tenant about the damage

It is very important that you talk to your tenant about the property damage, however awkward it may feel. Having an objective and professional discussion will help you understand how the damage occurred and how to proceed from there. Handling property damage situations become a lot easier when your tenant agrees with you. After all, accidents can happen to anyone.

If your tenant has been paying their rent on time and has had no other issues, you may be able to negotiate a plan for fixing the damage. If there is extensive damage, you may not be able to cover it all with just the security deposit. In such situations, it becomes necessary to negotiate with the tenant about how to cover the rest of the costs.

Whether your tenant is cooperative or not, it is crucial that you document the whole situation till you have reached an agreement and the repairs have been made. Documentation protects the property owner as well as the tenant.

If you are unable to come to an agreement with your tenant or if your tenant is aggressive, things can get a little more complicated. Say you are unable to reach the tenant despite repeated attempts, then it is best that you deduct the repair costs from the security deposit. If the repairs cost more than the security deposit, you may be able to file a claim with your insurance company. Many landlord insurance policies provide property damage coverage.

In extreme situations, you may also need legal assistance. You may need to consult with a lawyer to see how best you can approach the situation. As a last resort, you may need to adopt extreme measures, such as tracking down the tenant or filing a court order for wage garnishment. However, these measures are complex and time-consuming and should be used only as a last resort.

Deduct from the security deposit

Almost every tenant needs to pay a security deposit before occupying a space. The security deposit can help offset the cost of a tenant causing property damage. It is your safety net, especially when property damage exceeds the normal wear and tear.

Having a record of the property becomes very important if you want to be able to justify the deduction from the security deposit. Formal documentation can be very helpful for justifying a deduction from the security deposit. 

If you keep photos and other records of the time when the tenant moves in and out of your property, you will be able to show when a tenant damages your property during their stay. You will not need to hunt around for evidence to prove that your tenant caused the damage and that your property was not damaged before they moved in.

Like landlords have rights, tenants have rights too. You cannot deduct their security deposit without solid evidence. If you deduct from the security deposit without proper proof, a tenant can take you to small claims court. Tracking and documenting the property damage can help you prevent matters from escalating.

Know your rights

As a landlord, you should know your rights when a tenant damages a property. Besides normal wear and tear, any other property damage must be paid for by the tenant. This is yet another reason why it is crucial that you document everything about your affordable housing property from the day a tenant moves in till they move out. It is a good idea to keep a list of the damage and repair costs so that you can send them as a formal notification for property damage.

Some tenants may be cooperative and agree to pay for the damages. Aggressive or defensive tenants may be more difficult to deal with. If a tenant does not pay for the property damage, you can always resort to the law. You may even need measures like filing a police report or getting an eviction notice. Whatever may be the case, you should always try to remain calm, objective, and professional.

Conclusion

Taking proactive steps to prevent property damage is the best way to prevent it. Performing a thorough tenant screening can help you avoid a lot of headaches. A reasonable but higher security deposit can act as a cushion in case of tenant damage.

It can be quite stressful if your affordable housing property is damaged by your tenants. Running a rental business is stressful as it is. However, property management software can help take away a lot of the stress.

ExactEstate’s property management software offers a range of features, including online leasing, online payments, accounting, tenant screening, and more.

Do you want to know how ExactEstate can help your rental business? Schedule a demo today.