Villas & Vacations - in the AlgarveVilla Club Ltd

Sociedade de Mediacao Imobiliaria Lda (AMI 715)
More   Damages

Worried about Rental Damages?

Like everything in life, there are always risks when renting out to holidaymakers but we do our best to minimise these risks. Although damages do not occur on a regular basis, they can happen! So, in order to give our owners some peace of mind, we carry out pre-arrival inspections as well as departure checks to ensure no damages have occurred. Any observations are reported and we will take immediate action to rectify anything that is amiss.

The truly difficult task is evaluating whether a damage occurred due to negligence on the clients behalf or due to wear and tear. Usually the owner's point of view always differs from that of the client. At Villas & Vacations, we endeavour to ensure that the most fair solution is applied.

Wear & Tear vs Damages - the difference.

When evaluating a damage, we have to carefully examine the situation to correctly determine whether the rental client should be held responsible or whether it was caused due to the item being tired. Please see some examples below:

  • The fabric on a sitting room chair or on a sofa that has been used by many people before, splits open. Is it the responsibility of the last person that sat down to pay for a new chair or re-upholstery of the sofa? Of course not! Any item used on such a regular basis will start to wear out and will be in need of replacement sooner or later. Therefore, the last client to sit on it before the fabric split cannot be held responsible and this type of situation is clearly evaluated as "wear & tear".The replacement or re-upholstery is the owners responsibility.
  • The client drops an ornamental vase and it shatters into pieces. While this is obviously an unfortunate accident on behalf of the client, it is not categorised as "wear & tear" as the item would not have broken if it had not been dropped by the client by unnecessarily handling it. In this situation, the client is held responsible and is charged, at a reasonable amount, for a replacement vase.

Please see below a few examples of situations that have occurred in the past:

Type of Damage The Facts Owner Says Client Says What we agreed...
Broken Sunshade The sunshade fell over due to strong wind and got damaged beyond repair. Clear negligence of the client, they must have left the sunshade open during a windy day/night. It was only an accident and it is not my fault that there was a lot of wind! The client must pay for a new sunshade. It is the clients responsibility to ensure that the sunshades are properly closed and secure when not in use or if the wind gets too strong.
Broken chair Client sits down and a chair collapses. The chair must have been loose or in an unsafe condition. If charged for the chair, he/she will counterclaim for hurting his/her back. The client must pay for a new chair because he must have sat down improperly. The chair was indeed very old, creaky and loose. The damage is considered 'wear and tear'. The owner should replace/fix the chair to avoid any future accidents.
Broken lamp The lamp was on a bedside table near a curtained window. The wind blew the curtain which overturned and broke the lamp. The damage occurred whilst the client was in occupation so he is responsible. Furthermore, it is part of a set of three lamps which cannot be purchased individually. Therefore a new set of 3 lamps must be paid for by the client. It was not my fault the lamp had been placed in such a dangerous position - it was an accident waiting to happen. I will not pay for one lamp, let alone three! The owner should be covered by insurance. It is the clients responsibility to ensure that, during their occupation, all aspects of the villa are safe and secure. Leaving a window open on a windy day can inevitably cause things to topple over. The client was asked to pay for one lamp, as a compromise between them and the owner and we bought a replacement as close as possible to the original.

How can we minimize the occurrence of damages?

Whether you rent out your property or not, there is always a risk of damages occurring (ie: flooding, break-ins, etc). Therefore we cannot guarantee that no damages will ever occur to an owner's property. We do, however, work towards minimizing the risks of damages happening by implementing the following:

  • Clients are obligated to provide a form of an online damage deposit pre-authorisation (via credit card) before they can access any property. However, we cannot just charge whatever we like as any charge has to have a solid justification that the client cannot contest.
  • We provide an information booklet for each property with guidelines on how things work, along with the location of user manuals inside the property.
  • Our housekeeping personnel are trained to raise the alarm as soon as any damages are spotted so that we can sort out any issues as promptly as possible.
  • We regularly inspect the properties that we manage to ensure that everything is in good order. If there is bad weather, for example, with news about floods, we will do our best to get around to all of our properties to check for any damages that may have occurred. In these cases, the sooner they are detected the easier they are to fix without causing more damage.
  • We recommend to all of our owners to have simple & easy to use equipment at their villas to avoid people not knowing how things work. The more complicated the equipment, the more likely that clients may cause damage.
  • Any valuable or sentimental items should be stored in a locked cupboard when rental clients occupy the property. Anything that is not easily replaceable should never be left out.
  • Get a regular inventory done. While it is impossible to perform inventories between clients departures / arrivals, it is advisable to get an inventory done after the rental season in order to replace any items that may be missing (ie: plates, cutlery, etc). This ensures that the property will be fully equipped for the new rental season.

What about insurance?

It is highly unlikely that any insurer in Portugal will offer coverage for accidental damages to your household items. It may be possible to insure specifically named items but this is only worthwhile if the said items are quite expensive.

Don't forget that insurers will also not just blindly replace your household items every time a claim is made. They generally have the same view to most people, which is that all household contents are subject to minor damage, especially if they are being used regularly.

So what's the bottom line?

One of the truisms of life is: one's own children, dirt and damage are reasonably OK - it is only other peoples' which are totally unacceptable!

Whether you rent your property or not, your contents will deteriorate from use and one cannot expect to rent out a property for an entire year and then find everything exactly the same. 'Wear and tear' is inevitable and we ask owners to assume that the value of contents will degrade by say 5% to 10% per annum. This means that any items will have to be replaced sooner or later as nothing lasts forever.

In all cases, it is of the utmost importance to also take into account the quality of the damaged item. Some items, while may be cheaper to purchase, do not have enough quality to have the same lifespan as higher quality items. Therefore, we cannot expect client's to be held responsible for an item that stops working properly due to its "life" coming to an end.

In practical terms, owners also degrade their household items at a similar rate to rental clients. What may be surprising is that usually the worst culprits are their own friends/family that are non-paying guests!

Villas & Vacations can help to safeguard your investment by ensuring the 'guidelines' above are implemented and use our best endeavours for the owner to be reasonably reimbursed for damages. However, if for any reason reimbursement is not possible, the potential for loss or damage always remains at the owner's risk.

Nothing in life is risk-free, but the good news is that rental clients seldom cause significant damage. In general we are able to successfully recover 100% of the claim in approx. 4 out of 5 cases. Other cases are inevitably a compromise. Fortunately, when viewed against the corresponding rental income, the risk of unrecoverable damage is almost inconsequential.

Posted: 2013-01-13      Click here to go back to summary