Lease Renewal is a Good Time to Resolve Tenant Damage

Managing many properties is challenging and demanding, and as such, requires proper procedures to reduce the risks and results of tenant abuse or misuse of the property. One notable area of risk management is preventing or mitigating a tenant’s damaging the property, and more particularly, to get the tenant to pay for damages to the property as quickly as possible and before having to make a claim on the security deposit.

One way a property manager can do this is to take advantage of the time for lease renewals to pay for damages caused by the tenant. Consider the following procedure in your property management practice. The timing of making this inspection and conditioning an offer to renew the lease on paying for damages is optimum when the lease renewal discussion is ripe because most tenants prefer to remain in their long term rentals and not move. Thus, the property manager is able to negotiate with such tenants more easily.

When a lease is approaching its natural expiration, a property manager can take this time to timely inspect the property before making an offer to renew the lease. This inspection will give the property manager information and knowledge regarding whether or not to offer to renew the lease and also to assess damages to the property caused during the lease term. If during the inspection, the property manager believes the tenant has caused damages to the property, the manager can evaluate the damages and notify the tenant that before he will make an offer to renew the lease, the tenant must pay for particular damages caused to the property, as well as fees or rents accrued during the lease term. The communication should be written, and should require the tenant to pay for the itemized and detailed damages before a lease renewal offer will be made. If the tenant refuses to pay for those damages and fees, the manager will not offer to renew but will terminate the lease and make an appropriate claim on the security deposit when the tenant vacates pursuant to Florida Statutes Section 83.49.

However, before the manager concludes that the tenant is liable for suspected damages–and thus, conditions his offer to renew on the tenant’s paying for that damage–the manager should (1) consult with a professional or expert in the area that concerns the damage (e.g. building contractor, lawn expert, etc.) to assess the cause of the damage, the options of repair or replacement and the fair market value of the “damage”; and (2) consult with his property management law attorney to get a sound legal opinion of the strengths or weaknesses of trying to hold the tenant liable for the damage. This legal consult will require the property manager to provide the evidence (i.e. move in/out inspection documents, photographs, estimate quotes, characteristics of the property, etc.) of the damage to the attorney, including proof of causation and valuation.

If the evidence is not strong that the tenant is liable for the damage or the item is not considered “damage” under the law, the property manager should not condition his offer to renew the lease on the tenant paying for the damage. If he does, he will risk losing a tenant unnecessarily. By using this procedure, the manager can better protect the property, prevent damages from becoming worse over time, keep the tenant responsible for damages, ensure that the security deposit will cover any monies owed by the tenant at the termination of the lease, and please the landlord.

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