Damage to property caused by tenants reached €47,000

According to data from the insurance company BTA Baltic Insurance Company (hereinafter – BTA) for the last three years, damage to property caused by tenants' dishonest behaviour or negligence most often includes water leaks, various types of damage to finishes, and damage to household items. At this stage, the sum in indemnities paid by BTA to owners of rented properties for losses caused by tenants amounts to EUR 47,000. "A home is one of the most valuable possessions a person has. However, if it is rented out, it is important to take into account that damage caused by tenants, such as furniture, finishes, and household appliances, can be serious, even amounting to several thousand euros," shares Ivo Danče, Director of the BTA Insurance Claims Department. 

Rental "security deposits" are often unable to cover property damage 

When renting out a property, not only does the resident change, but so do the risks – in most cases, the owner has no daily control over how the property is used and how carefully safety conditions are observed. Information compiled by BTA shows that over the last three years, a total of 112 claims has been filed for damage to property caused by tenants, which shows that such cases are not rare exceptions, but an everyday reality. 

"Very often, landlords think that the security deposit, which the tenant pays in the amount of one or two months' rent when starting to rent a home, will be sufficient financial security even if the home is damaged. However, in reality, this amount is not always sufficient to cover the damage caused by the tenant, which can amount to several thousand euros. The situation is even more acute if the rental agreement does not include provisions for indemnification for damage – this is most often the case when the landlord offers their property for short-term rental," comments I. Danče. 

The amount of damage caused by tenants can reach several thousand euros 

The costliest case in terms of expenses and damage caused is related to the tenant's long-term negligence and deliberate damage, seriously damaging the walls and floors, damaging furniture, household appliances, electrical installations, bathroom equipment, and furniture. As a result, the owner was compensated by BTA insurance for losses amounting to EUR 2,529. 

In another case, a tenant managed to damage the property together with his friends, causing losses of more than EUR 2,500. Last year, a house in Limbaži was also damaged when the tenant's son deliberately set fire to the veranda, resulting in the owner receiving compensation of EUR 2,461. 

And there was a different case, when the landlord found extensive damage, while inspecting the house after the tenants had left – damaged floors, walls, ceilings, windows, doors, as well as kitchen and bathroom equipment. In this case, the indemnity paid amounted to €2,320. Similarly, last year, after the tenants left the apartment, the landlord found that the walls had been damaged by drilling, the mattress was partially burnt, and the kitchen equipment and blinds were damaged, for which BTA paid the owner €1,743 in insurance indemnity. 

"In rental relationships, it is essential to clearly understand the risks that most often threaten the rented property, when the tenant's liability arises, and what preventive steps allow the owner to protect themselves from financial losses. By combining appropriate property insurance coverage, which includes losses caused by tenants, with clearly formulated contractual obligations and the division of liability between the parties, the landlord can protect themselves from unexpected expenses. This is particularly important if disputes arise between the landlord and tenant in such situations," says Ivo Danče, Director of the Insurance Claims Department at BTA. 

Losses can be recovered from guilty tenants through recourse 

Although rented properties often suffer as a result of dishonest tenant behaviour, a number of different incidents, such as water leaks, fires, and domestic accidents, also occur due to unforeseen circumstances, which may still be the tenant's responsibility. In addition, in situations where damage is caused not only to the landlord's property but also to neighbouring dwellings, the financial consequences can be even more significant. 

"If, for example, the tenant does not maintain household appliances, carries out repairs improperly, or causes a fire or water leak through their actions, they may be liable for damage to both the rented property and third parties – i.e., to the property of neighbours. Therefore, it is crucial for people who rent a home to have third-party liability insurance, as indemnification for losses may be claimed from the guilty party on a recourse basis," explains I. Danče.