A few small nail holes from hanging pictures may be expected

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A tenant moves out, so you walk through the rental, and there it is: a stained carpet, scratched floor or a wall full of nail holes. Now comes the question landlords face all the time. Is this normal wear and tear that comes with owning a rental, or is it tenant damage that can be charged against the security deposit?

Sometimes the answer is obvious. Often, it isn’t. The line between everyday wear and actual damage can get surprisingly blurry, and making the wrong call can lead to disputes with tenants or even legal trouble.

For example, take a kitchen that gets used every day. Eventually, it’s going to show it. Cabinet handles loosen, countertops pick up a few scratches, and the floor doesn’t look quite as pristine as it did on day one. That’s very different from finding a cracked countertop, a cabinet door ripped from its hinges or a burn mark across the floor.

Rental properties work much the same way. Tenants actually live there, and even normal living leaves evidence behind. The challenge is knowing when those signs are part of owning a rental and when they cross the line into damage for which a tenant may be responsible.

What Counts as Normal Wear and Tear?

Normal wear and tear is the gradual deterioration that happens when people use a home as intended. Carpet becomes worn in high-traffic areas. Paint fades. Door handles loosen. Flooring develops minor scratches. Curtains and blinds can fade after years of sunlight.

The longer a tenant has lived in the property, the more normal deterioration you can reasonably expect.

Damage is different. A large hole in a wall, broken door, badly stained carpet, cracked tile or appliance damaged through misuse generally isn’t the result of everyday living.

As explained by legal experts Nolo, landlords generally may deduct from a security deposit for tenant-caused damage or excessive cleaning, but not for ordinary wear and tear. The age and condition of the damaged item can also matter. If a tenant damages carpeting already near the end of its useful life, for example, charging the full price of brand-new carpet may not be justified.

Then There’s the Gray Area

Some cases are easy. A smashed window isn’t normal wear and tear. Neither is a door with a hole kicked through it. But other situations aren’t so obvious.

A couple of small nail holes from hanging pictures may be expected. What about 20 holes on one wall? Light scratches on a hardwood floor might be part of everyday living, while deep gouges caused by dragging heavy furniture are another matter.

Carpet is a further example. Flattened fibers along a hallway after several years are hardly surprising. A large wine stain in the living room is something else.

Before deciding something is tenant damage, consider how long the tenant lived there, the age and previous condition of the item, the severity of the problem and what caused it. Most importantly, know what the law says where the property is located.

Potential Tenant Damage*

*These are general examples, not automatic legal classifications. Whether something is deductible depends on the circumstances and applicable state or local law.

Getting It Wrong Can Be Expensive

Security deposit deductions aren’t something landlords should treat casually.

In 2024, the Federal Trade Commission alleged that Invitation Homes unfairly withheld security deposits for charges that included normal wear and tear, pre-existing damage and renovations. The company agreed to turn over $48 million to compensate consumers and make changes to its practices.

In March 2026, the FTC announced that it was sending more than $47.2 million in refund checks to affected consumers.

Independent landlords aren’t dealing with security deposits on that scale, but the lesson is the same. If you withhold money from a tenant’s security deposit, you should be able to explain and document why.

Make Responsibilities Clear From the Start

A good lease should clearly explain the tenant’s responsibilities for caring for the property and reporting problems.

It also helps to provide instructions for anything requiring special care. If countertops shouldn’t be cleaned with abrasive products, say so. If you expect tenants to report plumbing leaks promptly, make that clear. A few minutes spent explaining how to care for the property could prevent an expensive repair later.

Landlords, of course, have their own maintenance responsibilities. The Legal Information Institute at Cornell Law School explains that residential leases generally include an implied warranty of habitability, although requirements vary by jurisdiction.

Damage caused by a leaking roof that a landlord failed to repair or faulty plumbing doesn’t become the tenant’s responsibility simply because it is discovered at move-out.

Choose Tenants Carefully

Protecting your rental begins long before move-out day.

A thorough and legally compliant tenant screening process can give you a better picture of an applicant before handing over the keys. Depending on applicable laws and your screening criteria, that may include credit information, eviction history and other legally permissible background information.

Previous landlord references can also be helpful. Did the applicant report maintenance problems promptly? Did they leave the previous rental in reasonable condition? Were there problems involving property damage?

No screening process can guarantee that a tenant won’t damage your property. Accidents happen. The goal is simply to make a more informed decision about who will be occupying your rental.

Whatever screening standards you use, apply them consistently and comply with applicable fair housing and tenant screening laws.

Document Everything at Move-In

At move-in, walk through the rental with the tenant using AAOA’s free move-in inspection worksheet. Go room by room and note the condition of walls, flooring, windows, doors, countertops, appliances and fixtures. Don’t overlook existing problems. If there is already a scratch on the hardwood floor or stain on the bedroom carpet, write it down.

Take clear photos or video where permitted. A picture taken at move-in can be far more useful than trying to remember what a floor or countertop looked like three years earlier.

Once the inspection is finished, both landlord and tenant should review the worksheet, sign it and keep a copy. Now everyone has the same starting point.

Do the Move-Out Walk-Through Together

When the tenancy ends, repeat the process.

When possible, schedule a move-out walk-through with the tenant before the keys are turned over. Bring the original move-in paperwork and a move-out worksheet so you can compare the condition of the rental then and now.

Go through the property together, room by room. If something has changed, write it down and be specific. “Large stain approximately two feet wide on living room carpet” is more useful than simply writing “carpet damaged.” Take photos when appropriate and compare them with your move-in records.

At the end of the walk-through, both landlord and tenant should review and sign the completed worksheet, with each keeping a copy.

A signature doesn’t necessarily mean the tenant accepts financial responsibility for every item listed. What it does provide is a shared written record of the property’s condition at move-out. That can help prevent the later argument: “That was already there when I moved in.”

Keep the Paper Trail Going

If you believe the tenant is responsible for damage, your documentation shouldn’t end with the walk-through.

Depending on local requirements, you may need repair estimates, invoices, receipts, photographs or an itemized statement explaining deductions from the security deposit. Keep copies of communications with the tenant as well.

This is where move-in records become particularly valuable. A photo of a badly scratched floor at move-out tells part of the story. A photo showing the same floor without those scratches at move-in tells considerably more.

Know the Rules Where You Own Property

Security deposit laws vary from state to state, and some cities have additional requirements.

There may be rules governing how much you can collect, where the deposit must be held, permissible deductions, required documentation and how quickly the remaining deposit must be returned.

Deadlines deserve particular attention. Missing one could potentially affect your ability to keep otherwise legitimate deductions or expose you to penalties.

Don’t rely on what another landlord told you or what you remember from years ago. Laws change. Check the current requirements where the rental is located, and if you’re uncertain whether a deduction is allowed, consult a qualified landlord-tenant attorney.

Your Rental Doesn’t Have to Come Back Looking New

Landlords sometimes have to remind themselves of something very basic: people actually live in their rental properties. A tenant who has been in a home for several years isn’t going to return it looking exactly as it did on move-in day. Some deterioration is simply part of owning and operating rental property.

At the same time, landlords shouldn’t have to absorb the cost when a tenant causes damage that goes well beyond ordinary use.

The line between the two won’t always be obvious. But clear expectations, good records, before and after photos, a walk-through with your tenant and a signed inspection worksheet can take much of the guesswork out of the process.

When you know what the property looked like on day one and what it looks like when the tenant hands back the keys, answering that all-important question, “who pays for what?” becomes much easier.

Finding the Next Tenant

Now it is time to replace that tenant. A smooth application and screening process can make a noticeable difference in how quickly your property leases.

AAOA offers tools designed specifically for landlords, including online rental applications, tenant background checks, tenant credit screening, rent collection and monthly rent reporting tools.

If you’re looking to fill that vacancy and streamline your leasing process, you can learn more at https://www.aaoa.com.

Disclaimer: All content provided here-in is subject to AAOA’s Terms of Use. Nothing contained on this website constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. AAOA recommends you consult with a financial advisor, tax specialist, attorney or other specialist who is able to properly advise you.