Fair Wear and Tear
What is fair wear & tear on a rental property?
At the end of a tenancy, when a landlord is just about to get their property back, they sometimes turn up and think: “Wait a minute, this isn’t the property I rented out!”
The walls are marked, the appliances are broken and a once shiny laminate floor looks as if the tenant has been holding weekly salsa parties. So what can a landlord do about it?
The starting point for action
The landlord should of course have taken a rental deposit from the tenant, which should be held by one of the approved tenancy deposit schemes. Taking that as a presumption, it is now down to the landlord formulating their case. The starting point for action is always any prepared property inventory and schedule of condition.
The landlord needs a clear and accurate property inventory to prove the original condition of the rental property prior to the tenant / tenants moving in to win any tenancy deposit disputes.
Is it fair wear and tear?
Assuming the landlord has a well prepared property inventory they must now gather this, alongside any other evidence to help prove any change / damage to their rental property was caused during the period of the tenancy after the tenant’s moving in.
The landlord is challenged to assess what they perceive to be down to ‘fair wear and tear’ and what they judge to be beyond that, and needs to be compensated for by the tenant paying for the damage. This is where often the disagreements between landlord and tenant can arise.
Up to now, an amiable relationship might mean it comes as a shock to the tenant that a landlord is no longer smiling at the sight of a ‘couple of incidents’ of damage, mixed in with the speckled covering of blue tack all over newly painted white walls and the red wine stains on the carpet. These elements all add up and can tip over beyond what a landlord might perceive ‘fair wear and tear‘.
The mood of the landlord and tenant can change dramatically at this point. The tenant fearing the loss of part of their rental deposit is likely to insist that you can’t expect the place to be in the same ‘tip top’ condition as when they moved in, and that these various scuffs and marks are all part of day to day living. So where do you stand?
Understanding fair wear & tear
This is where landlords have to apply the principle of ‘fair wear and tear’ to the condition of their rental property.
The House of Lords defines ‘fair wear and tear’ as:
‘Reasonable use of the premises by the Tenant and the ordinary operation of natural forces’
A helpful statement, but not what you call exactly clear or precise. Like much of English law what really constitutes ‘fair wear and tear’ comes down to endless legal precedents. There is nothing that exists in statute that actually clearly defines ‘fair wear and tear’; the concept is too wide ranging to be enshrined in law.
The Association of Residential Letting Agents (ARLA) has produced some handy guidelines for its’ members on the criteria to consider when coming to a view on ‘fair wear & tear’.
- 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, what is clear, is that a landlord should not end up, either financially or materially better off than they were before the start of the tenancy or than they would have been at the end of the tenancy having allowed for ‘fair wear and tear’.
It follows therefore, (it’s an established legal tenet) that a landlord is not entitled to charge his tenants the full cost for having any part of his rental property or any fixture or fitting “put back to the condition it was at the start of the tenancy.” This in the eyes of the law and a Tenancy Deposit Scheme Arbitrator would constitute betterment.
The appropriate remedies available to the landlord therefore 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
Apportionment is one technique for taking into account ‘fair wear and tear’ and also avoiding betterment. It does this by allowing the landlord to assign a monetary value to items in what otherwise can be a very subjective process. The process of apportionment involves you breaking the costs into measurable chunks and assigning values to these. The technique is probably best explained by some worked examples:
1. Minor damage to an item. If there is a small element of damage to an item such as stain or mark on a carpet or mattress etc then it would be reasonable to make a charge of perhaps £15 – £35. This represents the cost of a “spot” clean or can be seen as a tenant’s contribution to a full clean of the whole item.
Alternatively it represents compensation for the diminution in value of the fixture or fitting involved. The costs are therefore apportioned and shared between the parties on the principles given above. E.g. the cost of new carpet would be £500 – but are apportioned £465 to landlord, £35 to tenant.
In the case of a small to medium size chip or mark, scratch or burn on a kitchen worktop – it would be reasonable to withhold perhaps £5 – £25. A landlord could of course decide to a purchase a new worktop or to have a new carpet put down but firstly they would have to prove using their inventory that the damage has been caused during the tenancy.
2. In the circumstances where the damage is so extensive or severe to the item the most appropriate remedy might be to have the entire item replaced. In this case it might be appropriate to apportion the costs of replacement 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
The facts of fair wear and tear
The process underlines clearly the importance for landlords of making a should full comprehensive Property Inventory and Schedule of Condition to be able to apply the principles of apportionment to a judgement of what is ‘fair wear and tear.
The more information kept on a rental property the better a landlord is placed to retain a fair amount of a disputed rental deposit. Tenants and landlords often disagree on perceived ‘fair where and tear’ and it’s only with clear documented evidence that a landlord can defend their position and fully justify why an element of a tenant’s deposit might be retained.
Landlords need to remember that any dispute also might require to be justified not just to the tenant but to a Tenancy Deposit Scheme arbitrator or even in the courts. This is why landlords should always have the correct landlord forms that establish without doubt what you know to be right.
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