What is ‘fair wear and tear’?
Is there such as thing as the ‘fair wear and tear’ of your buy-to-let property?
You hand over your shiny new rental property to a tenant. Two years later they hand it back with grubby scuffed walls and a stained ‘manky’ carpet claiming that they should get their full deposit back and the lustre that has been knocked off the property was purely by the effluxion of time. Is that fair? Where do landlords stand?
Firstly, 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’
Mmmm? Helpful but not what you call exactly clear or precise. Like much of British law the essence of what constitutes ‘fair wear and tear’ is buried in the many precedents set by court cases over hundreds of years and is unfortunately not neatly enshrined in a tidy bit of statute.
Clues on ‘Fair Wear and Tear’
ARLA the Association of Residential Letting Agents have helpfully highlighted a number of factors that a landlord needs to consider when coming to a view:
• 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
Along with ARLA there are also some tips of what constitutes ‘fair wear and tear’ from the tenancy deposit operator My Deposits. – read here
Importantly there is an established legal tenant that the landlord does not end up in a financially or materially better position as a result of claiming ‘fair wear and tear’. This would constitute betterment.
Avoiding the confusion.
Often the easiest way of avoiding conflict with a tenant over what constitutes ‘fair wear and tear’ is early intervention. This is best done through regular interim inspections of the property during the tenancy. This way a landlord or letting agent can highlight potential damage and address the issue directly and thus avoid the claims by the tenant at the end of a tenancy that it was done before they moved in or indeed it occurred just as part of the day to day use of the rental property.
The game changer in all this has been the advent of the Tenancy Deposit Scheme (TDS).
No longer can the landlord be judge and jury over what is ‘fair wear and tear’ and what constitutes damage. With the arrival of an arbitration led approach; a landlords inventory has never been so important and is now central to establishing what constitutes ‘fair wear and tear’. An expert adjudicator recently gave his views on our blog.
The result of the Tenancy Deposit Scheme with independent arbitrators has meant that this is far less likely. Should a dispute over the deposit arise now it will be down to independent arbitrators to come to a view.
The importance of the property inventory
The TDS and the prominence of the arbitration process means that the property inventory has taken a pivotal role when it comes to the determination of ‘fair wear and tear’ should a dispute arise between landlord and tenant.
When it comes to staking your claim to any tenant or adjudicator a landlord need to be familiar with the principles of apportionment when calculating the final figures for any claim. Have a look at this recent piece on apportionment for some clues on how all this works.
Is it fair?
I come back to my original question. Is there such a thing as ‘fair wear and tear’? Well yes clearly there is; but are landlords being fairly treated by the new regime of the Tenancy Deposit Scheme and its’ army of adjudicators. This may be the more pertinent question to answer.