What is Fair wear and tear when renting out your property?
Is this the same property?
A few landlords have come across this, when the tenant moves out and the landlord walks in to see a place they don’t even recognise. Appliances are dirty, laminate floors damages, walls all scuffed. The once perfect property is looking distinctly scruffy, as a landlord you know this is not right, what can you do about it?
Where do you start?
Well you should have taken a deposit and if the tenancy was before the 6th of April 2007 you are probably holding it yourself, if it was taken after the 6th of April 2007, it will be under the provisions of the Tenancy Deposit Scheme. Whichever way your deposit is stored, firstly you will need to go back to the inventory which was prepared when the tenants first moved in.
Quality of your paperwork
How successful you are is going to solemnly depend on the quality of the “paper work” you did during “check in/check out” especially the inventory which records the condition of the property. You should have written proof of the condition of the property and photos from the start to help your case. These should have been signed by ALL the tenants saying they agree with the inventory.
How to make that judgement
Assuming you have a well prepared inventory, then comes the difficult bit, were having decided what has changed since the “check in”, an assessment of what is “wear and tear” and whether the tenant should legitimately pay for the damage will need to be made. This is where disagreements between the landlord and the tenants usually come about. The tenant is more than likely going to insist that the property will be in the same condition as a year ago because scuffs and such will happen on a day to day occupation, where does the landlord stand?
Understanding fair wear and tear
This is when the principle of fair wear and tear comes into action on the condition of their property. There is nothing written in stone which actually defines what “fair wear and tear” is everyone’s concept will be different and too wide to be made law. The Association of Residential Lettings Agents (ARLA) has produced some guidelines for its members, on what to consider on what is “fair wear and tear”. These are:
- The original age, quality and condition of any item at commencement of the tenancy
- The average useful lifespan to value ratio (depreciation) of the item
- The reasonable expected usage of such an item
- The number and types of tenants in the property
- The length of the tenants’ occupancy.
Legally the landlord to the property should not end up either materially or financially in a better position than before the tenancy commenced or than they would have been at the end of the tenancy having allowed for fair wear and tear. A landlord is not entitled to charge the tenants the full cost for putting back any part of his property, such as a fitting or a fixture, to the condition it was at the start of the tenancy as this would be betterment. Therefore, appropriate remedies available to the landlord might range from:
- Replacement of the damaged item where it is either brutally or severely damaged beyond repair or its condition makes it unusable.
- Repair or cleaning
- Compensation for diminution in inherent value of the item or the shortening of its useful normal lifespan.
The apportionment technique
There is a technique called apportionment, which takes into account fair wear and tear and avoids betterment. This is the process of breaking down the costs of fair wear and tear into measurable chunks which then allows you to assign a monetary value to your items. For example:
- Small damage or small stain on a mattress or carpet for example, could be around £15. E.g. this could be a contribution towards a full clean of the item, or pay for a spot clean (just of the stain) or compensation for the diminution. A small to medium mark, chip, burn etc on a kitchen work top or table could be around £5-£30 depending on the size of the mark. If the landlord wanted to purchase a new item such as a new kitchen worktop or carpet they could, but they cannot charge the tenant for the full cost.
The costs should be apportioned, shared between the parties basing upon the principles written above, for example the cost of a new carpet could be £300 and the tenants stained it only slightly. Apportioned £275 to the landlord, £25 to the tenant.
- In the rare circumstances where the damage to the item was to extensive to affect the lettability or the quality of the property, the most appropriate cure might be to replace the items and apportion the cost according to the useful lifespan and age of the item. An example of how this might be calculated is shown below.
(a) Cost of similar replacement = £300.00
(b) Actual age of existing carpet/item = 3 years
(c) Average useful lifespan of that type of carpet/item = 10 years
(d) Residual lifespan of carpet/item calculated as (c) less (b) = 7 years
(e) Depreciation of value rate calculated a (a) divided by (c) = £30 per year
(f) Reasonable apportionment cost to tenant calculated as (d) times (e) = £210
Armed with the facts
With this understanding, the next time you have a tenant who raises these issues you can clearly explain and demonstrate why they shouldn’t get their full deposit back. Because of the Tenancy Deposit Scheme you will need to justify and prove your decision to the courts or an arbitrator, this is why you should always have the correct paperwork that proves your right when these issues arise.
If you would like to discuss any of the points above please contact My Property Box on 01325 582101 or email email@example.com.