Who Pays When Tenants Damage the Property Before They Move Out?
Rent it Right
by Janet Portman, Inman News
Q: I’m renting to a couple of college students and have both sets of parents as lease guarantors. Last month, the tenants had an accident in the kitchen that resulted in several hundred dollars’ worth of repairs. I notified the guarantors and asked them to repay me, but they refused, saying that they’re obligated only if the tenants can’t pay, and because I hold a security deposit, it’s clear that the tenants’ money (the deposit) should pay for the damage. Am I required to use the security deposit before turning to the guarantors? –Ann N.
A: Like many landlords, you’re doubtless concerned about depleting the deposit before the end of the tenancy, when you may need all of it to cover unpaid rent or needed repairs (beyond normal wear and tear). To protect the deposit, you could have your tenants pay now for repairs required during the tenancy.But to whom may you look for reimbursement? Your ability to demand payment from the guarantors instead of the tenants depends on your lease guarantee clause.
A thorough, unconditional guarantee will have these elements:
The clause should clearly make the guarantors “jointly and severally” liable, with the tenants, for all monetary obligations under the lease.
Your clause should warn the guarantors that they are not entitled to notice should the tenants fail to pay. It’s up to the guarantors to keep track of the tenants’ performance under the lease.
Finally, your clause should state clearly that you’re not obligated to get the money first from the tenants. Practically speaking, that means you can send the bill directly to the guarantors.
Here’s an example of a clear lease guarantee:
“Co-signer agrees to be jointly and severally liable with tenants for tenants’ obligations arising out of this lease, including but not limited to unpaid rent, property damage, and cleaning and repair costs. Co-signer further agrees that landlord will have no obligation to give notice to co-signer should tenants fail to abide by the terms of the rental agreement. Landlord may demand that co-signer perform as promised under this agreement without first using tenants’ security deposit.”
Take a look at your lease guarantee and see how it measures up. If your clause simply makes the parents guarantors of the lease, without more, you will need to learn whether a “typical” guarantee, in your state, is unconditional and contains all of the elements noted above. Next time, make it clear in the lease from the outset.
Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at [email protected].
Copyright 2010 Janet Portman
American Apartment Owners Association offers discounts on products and services for landlords related to your commercial housing investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.