It’s every property manager’s and property owner’s worst nightmare: a tenant who does malicious damage. Maybe the tenant was mad a repair wasn’t made, the rent was raised, or was just angry. No matter why the tenant intentionally damaged the property, the result is the same: damage needing to be repaired. It’s important to know what your liabilities are and what you can do to reduce your risk of a lawsuit.
Advise Clients to Protect Themselves
One of the greatest risks in this scenario is your client deciding to sue you for damages if their tenants wreck their property. It’s important to start by providing your client with some tips to keep him or her protected. This also helps to encourage a good relationship from the outset.
Make sure your client has insurance for the home. Landlord insurance is the best type of insurance for rental properties, because it covers not only the usual scenarios such as fire, storm, and theft, but also vandalism and tenant damage.
Find Good Tenants
As a property manager, you hold some responsibility in verifying the references and information of tenants placed in the property. Focus your time and effort in finding the right tenants. Life will be a whole lot easier for you and your client.
Be Strict With Inspection Schedules
Record the condition of the property at the beginning of the tenancy and obtain the tenant’s agreement on this condition report. This checklist can then form the basis for regular inspections, which means it will be easier to spot any new damage and identify any parts of the home where wear and tear is worsening.
Regular inspections are necessary to keep on top of the property’s condition and the tenant’s treatment of the property. Damage is best dealt with as it occurs. You must respect the privacy of the current tenants and abide by the law.
The landlord (or property manager acting on behalf of the landlord) may not abuse the right of access or harass the tenant. This means giving sufficient notice of the inspection and not doing inspections too frequently. To read about tenant rights in Texas, check out the U.S. Department of Housing and Development website.
When You Identify Malicious Damage
One of the first steps is to notify the property owner immediately. You and your client can only act within the terms of the lease agreement. Depending on the nature of the malicious damage, the property owner may not need to evict the tenant.
Mitigating Risks to You and Your Business
Your greatest risk to you, as the property manager, is in the lease agreement process. Do not sign any paperwork on behalf of your clients. The lease agreement must be between your client and the tenant only.
Most lawsuits involving property managers are about negligence. To protect yourself, you can include a liability waiver in your property management agreement which releases you from all liability in regard to property damage. But whether this will be enough to protect you depends on the circumstances of the lawsuit.