FAIR WEAR AND TEAR?!

What is fair wear and tear upon a rental property?

Is this my rental property?

The tenant moves out and you are confronted with a place that you don’t recognise as yours. What was a pristine rental property looks decidedly dishevelled. What can be done?

Taking action

A landlord should have a rental deposit, if not why? If the tenancy was pre 6th April 2007 then it’s likely to be held by the landlord, otherwise it will be under the provisions of the Tenancy Deposit Scheme. Either way a landlord will need to dig out the property inventory prepared before the tenants moved in. The property inventory and its schedule of condition will be needed as a basis for any action.

Quality of a landlord’s paper work

Any success in keeping / winning some of the rental deposit for any required repairs will very much depend on the quality of the ‘paper work’ that dates from before the ‘check in’ / ‘check out’. The details recorded in the property inventory relating to the condition of the rental property is key in this. Ideally a landlord will have used a pro-forma such as the FREE Inventory Form available on Property Hawk, alongside a selection of photos to illustrate the property’s condition. Most importantly, all these should need to of been counter signed by all the tenants to confirm that they agree with the descriptions.

Making a judgement of what constitutes ‘fair, wear and tear’

Assuming the property inventory was well prepared you can use it to make a factual assessment of what was down to ‘fair wear and tear’; and what damage the tenant should legitimately pay for.

The tenant is likely to insist that you can’t expect the rental property to be left in the same condition as when they moved in – scuffs and marks occur during day to day occupation. So where does a landlord stand?

Understanding fair wear & tear

This is where landlords have to apply the principle of ‘fair wear & tear’ to the condition of their rental property. There is nothing in statute which defines ‘fair wear and tear’.

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:

• Age and condition of any item at the start of the tenancy
• The useful lifespan of the item (depreciation)
• Expected usage of an item
• The number of occupants in the rental property
• The period of the tenants’ occupancy

A landlord cannot expect to 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.

A landlord is cannot expect to charge their tenants the full cost of an item or property, neither can they look to get any fixture or fitting “put back to the condition it was at the start of the tenancy.” as this would be perceived as betterment.

Therefore, a landlord can only look to seek compensation to :

• Replace an item that is damaged beyond economic repair or is left unusable
• Repair or cleaning
• Compensation for diminution in inherent value of the item or the shortening of its useful normal lifespan

The apportionment technique

To avoid betterment landlords can use a method called apportionment. This enables the costs of ‘fair wear and tear’ to be split into measurable pieces to which a monetary value can be assigned.

Here is an example:

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

Keep an accurate record of the state of a rental property

Landlords need keep an accurate record of the state of their rental property and have it signed by new tenants on moving in if they are to stand a chance of claiming any justifiable figure from a tenant’s rental deposit.