FAIR WEAR AND TEAR?!

Is this my property?
We’ve all come across it.  The tenant moves out and you are confronted with a place that you don’t recognise as yours. The walls are scuffed the appliances are dirty and the laminate floor looks as if the tenants have been having salsa parties every weekend.  Your pristine apartment is looking decidedly dishevelled and you get the feeling that this is not right.  What can you do about it?

Starting point for action
Firstly, you of course have should have taken a deposit.  If the tenancy was pre 6th April 2007 then you are likely to be holding it yourself.  If not, then it will be under the provisions of the Tenancy Deposit Scheme.  Either way what you need to do is go back to the inventory you prepared when the tenants moved in.  This is the starting point for any action.

Quality of your paper work
Your success is going to depend on the quality of the ‘paper work’ prepared during ‘check in’ / ‘check out’ and in particular the inventory recording the condition of the property.  You will have ideally used a pro-forma such as the FREE Inventory Form available on Property Hawk together with a selection of photos illustrating the condition of your lovely gleaming apartment. Most importantly all these should be counter signed by all the tenants to confirm that they agree with them.

How to make that judgement
Assuming you have a well prepared inventory you are now ready for the difficult bit.  This is where having decided on what has changed between the ‘check in’ and the ‘check out’ you have to make an assessment of what was down to ‘fair wear and tear’; and where the tenant should legitimately pay for damage. 

This is where disagreements between you and your tenant are likely to a rise.  Up to now they have been all very amicable anticipating that this will help them secure the return of their full deposit. 

However, when you have to break it to them that having blue tack all over the walls was not really in the rental agreement & red wine stains on the carpet are not enhancing the look of your apartment, this is when things can get interesting.

The tenant is likely to insist that you can’t expect the place to be in the same condition as when they moved in because of the shear fact that scuffs and marks occur during day to day occupation.  Where do you stand?

Understanding fair wear & tear
This is where landlords have to apply the principle of fair wear & tear to the condition of their property

There is nothing in statute which defines ‘fair wear and tear’; the concept is too wide ranging to be enshrined in law. The Association of Residential Letting Agents (ARLA) has however produced some useful guidelines for its’ members on what to consider when coming to a view on it. 

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 type of occupants in the property
• The length of the tenants’ occupancy

Legally a landlord should not end up, either financially or materially in a better position than he was in at the commencement of the tenancy or than he would have been at the end of the tenancy having allowed for fair wear and tear. 

It follows therefore (and is an established legal tenet) that a landlord is not entitled to charge his tenants the full cost for having any part of his property, or any fixture or fitting “put back to the condition it was at the start of the tenancy.”  This would constitute betterment. 

Therefore, appropriate remedies available to the landlord might range from:

• Replacement of the damaged item where it is either severely and extensively damaged beyond economic 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 for taking into account fair wear and tear and also avoiding betterment and this is called apportionment.  Apportionment is the process of breaking down the costs of ‘fair wear and tear’ into measurable chunks and thereby allowing you to assign a monetary value to items in what can appear to be a very subjective process.

It is probably best illustrated by way of some very general examples:

1. Minor damage to an item, a small to medium stain or mark on a carpet or mattress etc – perhaps £15 - £35 e.g. the cost of a “spot” clean or, this amount as the tenant’s contribution to a full clean of the whole item, or as compensation for the diminution. 

A small to medium size chip or mark, scratch or burn on a kitchen worktop – perhaps £5 - £25.  A landlord could of course decide to a purchase a new item, to have a new carpet put down or a new kitchen worktop installed if they wished, but they cannot lawfully charge the tenant for the full cost. 

The costs should be apportioned and shared between the parties on the principles given above.  E.g. cost of new carpet £500 – apportioned £465 to landlord, £35 to tenant.

2. In the rare circumstances where damage ( to the worktop/carpet/mattress/ item etc) is so extensive or severe so as to affect the achievable rent level/lettability or quality of the property the most appropriate remedy might be replacement and to apportion costs according to the age and useful lifespan of the item. 

Below is an example of how this might be calculated.

(a)    Cost of similar replacement carpet/item =    £500-00
(b)    Actual age of existing carpet/item =    2 years
(c)    Average useful lifespan of that type of carpet/item =    10 years
(d)    Residual lifespan of carpet/item calculated as (c) less (b) =    8 years
(e)    Depreciation of value rate calculated as (a) divided by (c)    £50 per year
(f)    Reasonable apportionment cost to tenant calculated as (d) times (e) =    £400.00


Armed with the facts
Armed with this understanding the next time a tenant raises this issue you can clearly demonstrate why they should not get their full deposit back.  Remember though; the arrival of the Tenancy Deposit Scheme means the chances are that you will not only have to justify your decision to your tenant but also prove it to an arbitrator or the courts.  This is why you should always have the correct paperwork that proves what you know to be right.

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