I think we can all agree that:
Collecting for damages from tenants is difficult!
or is it?
Well, it turns out you can increase your collection rate and reduce damages downloading the free forms and also following the techniques I set out in this article.
In this article I will show you exactly what you need to do from the moment you find a tenant until the day you evict them. I will also link to a page where you can download over 48 forms to use when dealing with your tenants.
But first, you should read about how to avoid bad tenants in the first place. We can avoid all these problems simply by finding better tenants.
Before you even consider sending a letter to your tenant for damages to your property, you need to identify and document the damages. Hopefully, you have an inspection checklist with monthly or quarterly inspections. Additionally, you should have had a move-in checklist that documented the condition of everything on the property.
Your documentation should include a minimum of:
I can't say what documentation you will or will not need, but I just suggest getting as much as possible. I always assume every dispute will land in court, so we should be overly prepared.
You may not need to send a letter to your tenant for property damages if their renter's insurance covers the damage. What? They don't have insurance? Check out Why Every Tenant Should be Required to Get Renters Insurance.
Alright, now that we cleared that up, back to insurance. Not every circumstance or every type of damage is covered as coverage is different in every policy. Check with the tenant's policy and determine if it is or isn't covered. If it is, have your tenant initiate a claim. You should be listed as a payee on the policy so the insurance can pay you directly for any covered damages. If it isn't covered, then move on to the next step.
If the tenant is living in the property, and you have a decent relationship with them, you can ask them to pay the repair person directly. *Note: you should check to see if this is legal in your state first.
How do you develop such a great relationship with tenants. Well, it isn't easy. There is an art and a science to tenant relationships and you need to read this article about being a great landlord to help resolve problems in the future.
Not all tenants are bad and many are willing to accept responsibility. I've seen some even get the repairs done on their own! So, I have found asking the tenants to pay directly for property damages can be less harsh than sending a demand letter in these circumstances.
Well, it cuts you out of the middle. Also, payment is usually due upon completion of the job and usually the tenant is present for the repair because it's done in their own home. Since everyone is together in the room at the same time, why not cut yourself out and have them pay directly. Plus, if the repairs are expensive, the sub-contractor can explain directly to the tenant.
The only thing you need to do is to remind the contractor or handy-man that they need to do the work to your specifications and disregard any instructions from the tenant. Also, make sure they know that you will pay them if the tenant refuses to pay.
Contractors also may prefer to charge the tenant because you probably get a discount if you provide a lot of work. They can charge the fair retail price to the tenant for fixing the property damages, instead of getting the reduced price the professional landlord gets.
If you were unfortunate enough to get some bad tenants, you should first check out how to deal with bad tenants. It's not easy, but as I outlined, you should always be professional. This is your job, but it's their home and life. People become emotional about their personal space and it doesn't help when a landlord also gets emotional.
If you aren't able to resolve this issue without demand letters, then you can find two sample letters below. I have provided a polite letter to the tenant for property damages as well as an angry letter to the tenant. You can also find sample statements to deduct money from the security deposit at move-out to pay for property damage caused by the tenant.
Note: All information is for informational purposes only. Everything provided here is not legal advice. It is my own experience and documents that I have personally used and should be used as reference to help you. I do not know if it will work for you or in your jurisdiction.