Rental Homes: You Break It, You Bought It?

 

   

“The “Pottery Barn Rule” is an American expression alluding to the policy of “you break it, you bought it” or “you break it, you remake it”, by which a retail store holds a customer responsible for damage done to merchandise on display.  It generally ‘encourages customers to be more careful when handling property that’s not theirs.’”

Wikipedia definition of the “Pottery Barn rule”

 

I think every parent has there own story on this concept.  My version comes in “Hobby Lobby” when my young son smashed a glass Christmas vase while “admiring” it.  I was within a 50-yard radius (which apparently puts me in the “bad” or “absentee parent” category); I heard the crash and prayed no Furniss was involved.  I wasn’t so fortunate.

 

The next step was to ‘fess up to a cashier or store manager.  As I searched the available employees up front, I was left with the strategic decision of who to approach:

 

1. The 17-year old (does he look apathetic or one that would stick me with store policy?)
2. The middle-aged woman (does it look like she might sympathize/empathize?  Or is she the type that makes an example of a parent who prioritizes reading “Calvin & Hobbes” ornaments over watching his kids on the other side of the store?)

 

The downside of either was $17.99 + tax and a stern look.  The upside was getting off with a warning.  I approached the front gingerly and dutifully offered to pay.

 

“Don’t worry about it!  It happens all the time!”, the middle-aged woman cheerfully chirped.  “Chip!  Go clean up aisle 5.”  The 17-year old gave me a look and grabbed a broom.  Mercy won out.

 

One of the hardest things of being a property manager is the security deposit dispensation after a tenant moves out.  Homes are rarely left in perfect shape which leaves the owner paying a bill to get the rental home back in market shape.  The question that is left is how much of the bill should the tenant shoulder and how much falls under “normal wear and tear”, which is legally permitted. 

 

The problem is that nothing in a house costs $17.99!  Things are expensive.  Steam cleaning a carpet costs a few hundred dollars; if the carpet needs to be replaced, it’s now in the realm of thousands of dollars.  The costs are similar for painting- touch-up can be much less versus a full paint job, but it’s still in the several hundred dollar range. 

 

Very few tenants ‘fess up and offer to replace the carpet or paint the house after they vacate.  In fact, most say that the “place was like that when they moved in” and not getting their full security deposit back is nothing short of an injustice.  Property managers tend to utilize pictures/videos and tenant-filled out “move-in inspection reports” to document what the home looked like prior to home occupation.  These are helpful to ascertain the truth.

 

Regardless, costs can be high if a home is not taken care of.  And if not, there can be a large degree of sticker shock when a tenant receives a bill for repairs that runs in excess of their security deposit.  How could this happen?

 

The components of homes are expensive.  And someone needs to fit the bill.  The assumption can’t be made that the landlord pays for everything short of a wall being knocked down.  “Normal wear and tear” cuts both ways.  Abnormal wear and tear is costly and the tenant is legally responsible for it.

 

It is a win-win when a landlord can return a non-docked security deposit to a tenant- trust me!  Then no one needs to shell out funds to repair folks and a house can be turned over for another family to move into; this is the most desirable and profitable outcome for all involved.

 

But, with rental homes, if you break it, you bought it.  It may “happen all the time!”, but someone has to pay the piper and most home issues are not cheap to fix.  Smashing a $17.99 Christmas vase is one thing, but see what the “Hobby Lobby” cashier says if your kids clip the branches of their $2K “Super-Deluxe” Christmas tree.

 

Happy Landlording!