Determining property damage liability

MAILBAG

July 02, 2000

Dear Mr. Azrael:

I own a condo, which has had three different tenants in the last four years. The condo is 14 years old and was occasionally used by members of my family during business trips mainly as a "bedroom" for the first 10 years.

Last month, I made a visit to the condo for the first time since it had been rented. It has been unoccupied since January. To my horror, the condo was in poor condition with some very visible damage. I immediately called the agent who was handling the unit and told her to take it off the market. I told her that I wouldn't want anyone in my condo who would consider renting such a run-down unit.

At that time, she said that it probably wasn't up to my standards, but was for renters. This agent never notified me of any damages when tenants left and I was always instructed to return their deposits. I took pictures of the damage, which I sent to the manager of the agency. He sent me a short letter which contained this paragraph:

"I am sorry that you are disappointed in the property management services provided and the current condition of your property; however, I do not agree with your assessment of fault. The condition of your property is consistent with other 19-year-old properties, reflecting normal wear and tear and continuous tenant occupancy."

As stated above, this condo is 14 years old and has had tenants for only four years. My question is, do I have any recourse? What is my next step? Any insight you can give me in this situation will be very much appreciated.

Dorothy Workinger, Timonium

Dear Ms. Workinger:

A property management agent has a duty to the owner to use reasonable care and skill in performing his or her responsibilities.

Typically, a management agent's responsibilities include screening tenants, supplying written leases, collecting rents, arranging for needed repairs and notifying the owner of problems relating to the property. The agent usually sends the owner a monthly statement, showing the rents collected and expenses paid. The balance is remitted to the owner. The monthly expenses usually include the agent's management fee, which often is based on a percentage of the rent collected.

It appears that the property lease used by your agent required tenants to pay security deposits. A security deposit is held in escrow until the tenant vacates the premises. A security deposit may be used by the owner to cover any unpaid rent and to pay for cleaning or repairs beyond normal wear and tear.

Some expenses, such as carpet cleaning and repainting, are usually considered "normal wear and tear" items, which are not charged against the tenant's security deposit.

Other expenses to fix items damaged by tenant misuse or abuse are beyond "normal wear and tear" and can be deducted from the security deposit. Maryland law provides a detailed procedure that must be followed before a property owner can withhold all or part of a residential tenant's security deposit.

Your letter describes a case where the property manager has failed to report "very visible damage" that left your condo "in poor condition." To make matters worse, the agent always instructed you to return the full security deposit. The manager's letter denying responsibility shows he doesn't know how old your condo is or how long it has been rented.

The agent and her management company may well be found to have breached their duty to you. Had the agent exercised reasonable care and skill, she would have inspected the unit when each tenant left and notified you of any damages, so an appropriate deduction could have been made from the security deposit. The agent may be liable for the cost of repairs to the unit in excess of normal wear and tear.

The agent may raise several defenses to your damage claim. The written contract between you and the management company may limit the agent's responsibilities or may limit the amount of damages you can recover for an agent's breach. The agent may also claim that your lack of diligence contributed to your loss. You didn't visit the condo for almost four years. The agent may assert that you had a duty to inspect the unit more frequently and advise the agent of damages or problems you observed.

Ultimately, a court can decide whether the agent and her management company owe you money, and, if so, how much.

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