In an ideal world, your tenants will respect your property and will tell you immediately if they have caused any damage to it while offering to pay for any repairs.
But in the real world, you could find that your tenants damage your property, don’t bother to tell you and then refuse to foot the bill. They could even leave the property and disappear before you discover the problem.
So, what should you do if there is damage to your rental property?
Security deposits, inventories, and insurance
It is vital that you take steps to protect your interests from the outset and that means creating an inventory supported by photographs and insuring your property.
Every deposit that you take must be registered with an approved scheme which enables your tenants to dispute any deductions you wish to make for damages. You will not be able to demonstrate that any damage has occurred unless you create an inventory which is signed by all parties on the date that your tenants move in. You can create the inventory yourself, but it would be prudent to engage a professional to do this for you.
Your Assured Tenancy Agreement should state that the tenant must maintain the property in its current condition while allowing for wear and tear. The agreement must make it clear that the tenant is responsible for any accidental damage to the rental property caused by themselves or anyone they invite into the property.
Exercising your rights
You don’t want a nasty surprise at the end of a tenancy. The easiest way to avoid one is for you or your letting agent to inspect the property regularly. You have the right to do this and it is a right you must exercise to protect your asset. You need to give your tenant at least 24 hours’ notice of a visit and you must visit at reasonable times of the day. These stipulations are in place to ensure that your tenant has the option to be there if they want to be and to give them time to arrange for a witness to be present.
Your tenant’s obligations
Your tenant has a duty to report any damage they have caused. All parties can then try to reach an agreement on how repairs should be conducted and paid for. Sadly, such agreements are not always easy to reach and your relationship with your tenant may break down. Your inventory and supporting photographs could prove vital to resolving any disputes which arise.
Fair wear and tear
Whether your tenant has reported a problem to you or not, it is important to remember that they are not liable for reasonable wear and tear. You cannot deduct money from your tenant’s deposit for any damages which are the inevitable consequence of living in the property.
Minor marks on walls, a threadbare carpet wearing through or a new carpet showing signs of use would all be considered wear and tear. You will only be able to hold your tenant responsible for damage which could have been avoided.
If you wish to make a deduction from the security deposit for damages and your tenant does not agree to this, the third-party holding the deposit can act as an independent adjudicator. If you ask them to mediate, their decision is final, and you cannot take your tenant to court at a later date.
Your tenant has the right to see any receipts or estimates relating to the cost of repairs.
What about break-ins?
If your property is damaged during a break-in, the cost of repairs will be your responsibility unless you can prove that your tenant has been negligent. You are not responsible for the loss of your tenant’s possessions as this should be covered by their own contents insurance.
Keep your records up to date
It is essential to retain any evidence you have relating to the damage caused, together with the receipts for repairs. You will need these if you wish to make an insurance claim or you are unable to reach an agreement with your tenant and are forced to pursue them through the courts.
Evicting your tenant
If you discover that your property has been damaged, and your tenant has not informed you of this, you have the right to evict your tenant for breach of contract. But this can prove to be a lengthy and expensive process which is best avoided.
How to make a small claim
You can attempt to recover your expenses through the courts. Small claims are civil legal claims made to the county court which are of low value or minimal complexity. You can make a court claim for up to £100,000 and you don’t need legal representation. However, you can engage a lawyer if you wish and you will have to pay a court fee. The higher your claim, the more you will pay but you may be able to claim back your fee if you win. The smallest claims might be settled without the need to attend the court.
Before making a claim, you must write to your tenant requesting payment, offering the option of mediation and setting a date by which they must pay. If they fail to respond or to pay by the specified date, you can then initiate your claim. The courts want to see that you have made every effort to avoid litigation.
If your tenant has left the property and you don’t have their new address it will be difficult to hold them to account and your only option could be to pay an investigator to track them down.
The best way to avoid a disaster is to choose your tenant wisely. Unfortunately, no matter how diligent you are in this regard, you could find yourself in a difficult situation. A detailed inventory, adequate insurance, and regular checks are essential to protect yourself against a significant financial loss. Try to maintain a good relationship with your tenant and always attempt to resolve any problem amicably or with the help of a mediator before resorting to the courts.