Renting out a property can be a great form of investment if managed properly, but it also comes with risks. When letting out a property to tenants, one of the most challenging issues that Landlords can face is tenant-caused damage. Whether it’s accidental, malicious, or due to negligence, dealing with significant damage can be stressful and costly. If you find yourself in this situation, knowing the right steps to take can help you resolve the issue efficiently and minimise financial loss. In this guide, we’ll outline what to do if your tenant has caused major damage, how Landlord insurance can help, and how to prevent similar issues in the future.
Step 1: Assess the Damage
If you discover that your property has been damaged by tenants, the first thing you need to do is assess the damage at hand. Before taking any action, conduct a thorough inspection of the property. You should identify whether the damage is:
- Accidental – e.g., spills, broken appliances, or minor structural damage due to everyday use.
- Negligent – e.g., failure to report leaks leading to extensive water damage.
- Malicious – e.g., intentional vandalism or destruction.
It’s important to document everything with photographs and videos, noting the date and severity of the damage regardless of the perceived nature of it. This will be crucial for insurance claims, legal action or negotiating with the tenant and could also play a part in the overall repair or reinstatement costs.
Step 2: Review the Tenancy Agreement
From the very beginning, your tenancy agreement should outline the tenant’s responsibilities regarding property care and maintenance. You should include clauses related to damages, repairs, and deposit deductions and check these if you are unsure when the damage occurs. If the tenant has breached the agreement, this strengthens your case for holding them accountable.
Step 3: Speak to the Tenant
Before escalating the issue, it’s important to try resolving it directly with the tenant. By handling the situation his way, you can often resolve the issue before having to take further action. Approach them calmly, present the evidence, and discuss:
- Their perspective on what happened
- Whether they are willing to cover repair costs
- Possible solutions, such as using their deposit or an agreed payment plan
If the tenant refuses to cooperate or you can’t come to an agreement, you may need to approach things from a legal and insurance-based standpoint.
Step 4: Use the Tenant’s Deposit
If the damage is beyond normal wear and tear but may not need a full insurance claim, you can make a claim against the tenancy deposit. You can’t just use the money, however – you should always handle any deposit use through the deposit protection scheme where the funds are held. If the tenant disputes the claim, the scheme can also provide a resolution service to decide a fair outcome.
Step 5: Check Your Landlord Insurance Policy
If the damage is severe, your landlord insurance can help cover the repair costs. Depending on your policy, you may be able to claim for:
- Malicious or accidental damage by tenants that requires repair
- Structural damage from leaks, fires, or other tenant-related issues
- Loss of rent if the property is uninhabitable due to damage for the duration of any repairs or reinstatement.
Not all policies include tenant damage cover by default, so it’s important to check your policy details. If you don’t currently have landlord insurance that covers tenant damage, we can help you find a policy that suits your property situation best.
Step 6: Arrange Repairs
Depending on your insurer or the method through which you get the funding required for repairs, you may have to arrange repairs before, during or after the claim. This will be outlined in the wording of your policy. Regardless of the method required, take care to arrange for professional repairs that you can trust. Keep receipts and invoices, as they may be needed for tax purposes or insurance claims.
Step 7: Take Legal Action if Necessary
While insurance can help you from a financial standpoint, if the damage is extreme and the tenant refuses to pay or take action, you may need to:
- Send a formal demand letter requesting payment for damages.
- Pursue a small claims court case if the damage cost is within the claim limit.
- Seek eviction if the tenant is continuously neglectful or destructive.
Before taking legal action, consult a solicitor or property expert to assess the best course of action.
How to Prevent Future Tenant Damage
While you can’t eliminate all risks when it comes to tenants, you can reduce the chances of tenant-caused damage. Human behaviour can be unpredictable, but you should also:
- Conducting thorough tenant screening (credit and reference checks)
- Performing regular property inspections to identify early signs of damage
- Clearly outlining maintenance responsibilities in the tenancy agreement
- Ensuring you have comprehensive landlord insurance that includes tenant damage cover
Dealing with major tenant damage can be stressful and expensive, but the right landlord insurance can safeguard your investment. A well-structured policy can help cover repair costs, protect against rent loss, and provide peace of mind.
If you’re unsure whether your policy offers enough protection, speak to an expert at Ashburnham Insurance. We can help you find a policy that does suit your situation, and ensure that you are properly protected.