Archive for category Collections

Those of you that have appeared in eviction court in an attempt to obtain a money judgment against a tenant that has damaged your rental unit know that oftentimes the court will not allow you to recover the total cost to replace the damaged item.  Even when the court agrees that the tenant caused the damage there will be times when a landlord cannot obtain the full replacement value.

Often when this occurs it is due to issues surrounding the life expectancy of the item that was damaged.  Whether it is carpet, a stove, mini-blinds, or a hardwood floor, all items have an estimated life expectancy.

If the item is well past it’s life expectancy it would not be fair to award the landlord the full replacement cost because to do so would put the landlord in a better position than s/he was in prior to the item being damaged by the tenant.  To award the landlord the full replacement cost of a damaged item may result in the landlord obtaining what is often referred to as a “windfall” — and courts do not like windfalls.

Let me give you an example to better illustrate.  Assume the following facts:

1.     The carpeting in your rental unit is 5 years old.

2.     The life expectancy of carpeting in a rental unit is 10 years.

3.     The tenant damaged the carpeting by spilling Kool-Aid and cooking oil throughout and in the spots where there are not stains there are cigarette burns as the tenant used the carpet as an ashtray.

4.     The carpeting cannot be repaired and must be replaced.

5.     Total cost to replace the carpeting is $1,000  (I am trying to keep things simple so I don’t confuse myself with the math : )

Under the example above, a court would most likley only allow the landlord to recover $500 in damages against the tenant for the replacement of the carpet. 

The reasoning is that since the tenant moved into a rental unit with 5 year old carpeting, the landlord should only be able to recover for damage to a 5 year old carpet.  As such, the court will only allow the landlord to recover a percentage of the actual cost to replace the carpet.  In this example that would be $500 – or half of the actual cost — because the carpet was already 5 years old (out of its expected 10 year life span) when it was damaged.  If the courts allowed the landlord damages of $1,000 then the landlord would be gaining a windfall because (in theory) the landlord would be getting the tenant to pay for the entire cost of brand new carpet (rather then 5 year old carpet).

I know that many of you are snickering as you read this and are saying “the tenant is not going to be pay me anything as they are not collectible and I will never see any money.”  That may be true — and I empathize with you  — but I am merely trying to explain why courts will not allow a landlord to recover all of his/her replacement costs. 

In Milwaukee County there has always been an unwritten rule — at least as long as I have been practicing law — that the life expectancy of carpeting in a rental unit is 10 years.  I never knew where that number came from – I just knew that it was used.  Other counties may have assigned a different number to the life of rental carpeting, I don’t know, but in Milwaukee it is 10 years.

I have always wished that there was a resource that I could look to that listed the life expectancies of various items found in a rental unit such as carpeting, mini-blinds, sinks, hardwood floors etc. etc.  I have yet to find such a resource, but while reading the blog of another landlord — John (“Dr. Rent” ) Fischer – I noted mention of a resource that set forth the life expectancies of various household items.  John, who besides being a landlord is also a property manager, blogger, and president of the Wisconsin Apartment Association, was nice enough to provide me with a copy of that resource.

Here is a link to the document that lists the life expectancy of different products or items in the home.

We all know that the life expectancy of items in a rental property are much less then the life expectancy of furnishings in our own homes.  Let’s face it, rightly or wrongly, people do not treat property owned by a landlord as nicely as they would treat the property if they owned it themselves (and had to pay to repair or replace the item themselves if it were damaged).

Nonethless, having a document that compiles the life expectancy of items contained in an owner-occupied home is still a good starting point.

This information in this document was taken from various sources such as:

     – Magazines:  Appliance Magazine (Sept. 2005)

     – Specific Manufacturers:  Timberlake Cabinet Co., United States Ceramic Tile Co., Delta Faucet Co., Floortec, Georgia Pacific Corp.

     – Associations:  National Wood Flooring Association, American Concrete Pipe Association.

CAUTION:  This information should be used as a general guideline only.  As I mentioned previously, the information provided is for the life expectancy of items in an owner-occupied home — not a rental unit.  Additionally, much of this information is provided by specific manufacturers and may not be the same for the item that you are using in your rental property which might have been manufactured by a different company.

MORE CAUTION:  None of the information in the attached table should be interpreted as a representation, warranty, or guarantee regarding the life expectancy or performance of any individual product or product line.  You should not make a buying decision or product selection based solely on the information contained in this table.

EVEN MORE CAUTION:  The table is not a legal document and cannot and should not be cited in court.

I am merely providing this information to assist landlords who are attempting to determine a reasonable percentage of replacement cost to charge a tenant that has damaged your rental unit.  This information may also assist a newer landlord who does not have years of experience on which to rely when attempting to estimate the life expectancy for certain item in his/her rental property.

I was catching up on some long overdue blog reading this weekend and I came across a great blog post that I thought was very timely.  I asked the author is I could re-post his thoughts and he agreed.  The author of the post is Bill Gray who runs Rent Recovery Service, a company that assists landlords with collecting past due rent and damage charges from ex-tenants.  I was fortunate enough to have met Bill this past September at the AASEW’s Annual Landlord Tradeshow when Bill was gracious enough to fly to Milwaukee from Florida in order to present a seminar on collection issues to the attendees.  Anyone that has met Bill knows that aside from being extremely knowledgable in the area of collections, he is also a great guy.  If you are trying to collect past due rent and damage charges from an ex-tenant you should definitely give Bill a call at 212-561-5492 or email him at bill@rentrecoveryservice.com. 

With the city of Milwaukee attempting to pass a version of “landlord licensing,” with state politicians trying to short-circuit a landlord’s ability to properly screen tenants, and with what I find to be a very prevalent negative attitude toward landlords in general – I thought Bill’s post was timely.

Read the rest of this entry »