What is fair wear and tear?
Many costly landlord-tenant disputes have arisen as a result of differing interpretations of what is fair wear and tear. Knowing what is reasonable is, of course, critical when it comes to returning a tenant’s deposit.
my|deposits, the tenancy deposit protection scheme operator jointly owned by the NLA and Hamilton Fraser Insurance, has created a guide for landlords, offering advice on how to make a fair judgement call at the end of the tenancy period.
According to Eddie Hooker, Chief Executive of my|deposits, "Wear and tear is always a hot topic of debate and is very much situation-dependent. We have worked with landlords and our in-house disputes team to compile the guide, which is by no means definitive, but hopefully gives landlords some benchmarks and examples to consider when checking out their tenants."
Nine Guiding Principles
Unlike office leases which can require tenants to leave the property as they found it, often involving complete redecoration, domestic tenancies must allow for reasonable wear and tear.
Unfortunately, but perhaps unsurprisingly, there are no precise rules on what is 'reasonably acceptable'. Is that carpet just well used or irretrievably stained? What about picture hooks left on the sitting room wall? Or the cooker that looks as if it has produced a good three meals a day, every day?
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." When do ‘natural forces' become 'extreme heavy use' or worse?
Tohelp fill the gap left by current legislation, my|deposits offers the following nine pointers to help landlords decide what’s fair and what’s not. Clearly there are financial consequences when it comes to returning all or only part of a tenant’s deposit, so they should be viewed in the context of each particular tenancy.
1. Length of tenancy
The longer the tenancy, the more natural wear and tear will occur. Common sense questions you should ask before you decide a deduction, for example in the case of a carpet, include:
- how much wear does a carpet in your own home show after one, two or three years?
- what was its condition in the first place? Was it brand new or has it already seen a few tenancies come and go? Take account of all these factors before you decide what is fair.
2. Number and age of occupiers
The more bedrooms and occupants, the higher the wear and tear in all the common parts (sitting room, passages, stairs, bathrooms and kitchen). If some of the occupants are children, factor that in too. Scuffs and scrapes are unavoidable in normal family life. A property occupied by a single person will see far less wear than a family of four, so bear this in mind when it’s time for tenants to check out.
3. Wear and tear versus actual damage
When is deterioration in the property classified as damage rather than normal wear? If something has been broken, then that is certainly damage and would require either replacement or repair by a specialist. Light marks on the carpet might have to be viewed as unavoidable: fist marks in the plaster would not be. Equally, damage such as nail varnish spills on the floor or iron burns that have occurred due to negligence could see the tenant liable for repair. my|deposits advises landlords to consider whether the item has been damaged or worn out through natural use versus sheer negligence when making a judgement call. In a dispute about whether cleaning/repair is necessary versus complete replacement at the end of the tenancy, an adjudicator will examine the Check-in/out report, Statement of condition and any photos/videos in order to make an assessment of the condition of the property in relation to the original condition.
4. Quality of the accommodation
Another consideration is the quality or fabric of the property itself. Many new builds tend not to be quite as robust as older properties or conversions. Walls, partitions and internal painted surfaces tend to be thinner and therefore likely to suffer more stress, particularly in higher footfall areas of the property. This inevitably means that there is a greater need for redecoration at the end of the tenancy period.
There are a number of ways in which wear and tear can be kept to a minimum.
Firstly, keeping tenants happy so that they choose to extend their tenancies means you will reduce tenant turnover and will not be redecorating/renewing the property as frequently as you would for shorter tenancies.
Secondly, if tenants are in for longer periods of time, say two years plus, try to freshen up the property at regular intervals. For example, you could replace the carpet or paint a room. Strategic upgrades or enhancement of the property on a regular basis help to maintain the standard of the property and reduce the need for refurbishment at the end of the tenancy period. Treating the property as an owner-occupier means that you are ultimately minimising the wear and tear and need for redecoration when the tenant moves out.
Finally, set your expectations of the tenants from the outset. Remind them that regular cleaning and maintenance can keep a property in good condition. Perhaps conduct a regular check every three months or so, particularly early on in the tenancy, to check that everything is in order.
6. Photo & video evidence
Photo and video inventories are a helpful means of recording the condition of the property pre and post the tenancy and should provide a clear record of the property prior to its occupation. Equally, being able to document and provide photographic/video evidence to support a claim against a tenant will help everyone know where they stand. Make sure all photographic and video evidence is clearly dated.
You should, for example, try to capture photos/video footage of burn marks/permanent carpet stains, damage to flooring, scratches/damage to woodwork, tears and rips in furniture. Photos and video evidence on their own may not be sufficient, so support this with a comprehensive, detailed inventory.
If you are preparing the inventory yourself, rather than using an independent specialist, ensure that the tenant is provided with a copy, both at the Check-in/Check-out stage, and signs a copy so that they understand, and have a chance to discuss with you, what deductions you are proposing to take from the deposit.
Ultimately, the more evidence you have the better, so keep the inventory, photos, video, receipts and correspondence safe.
7. Common sense
It is important to correctly describe the condition of items when listing them e.g. if something is down as ‘brand new’ it needs supporting bills/receipts to prove this.
8. The adjudication process
Remember that the adjudication process in the event of a dispute, is independent and like a court of law, evidence based. An adjudicator cannot 'assume' and can only make a decision based on the evidence provided to him/her. You cannot challenge an adjudication decision unless it is via a court of law. The more evidence you produce and the more transparent you are with the tenant the higher your chance of success if a dispute is brought against you. my|deposits cannot interfere or ‘review’ any decision made by the adjudicator and cannot tell you what evidence will be acceptable to the adjudicator and what will not.
9. Best practice
Wear and tear is a topic that is open to interpretation. Ultimately, as a landlord, your aim is firstly to minimise the level of wear and tear in your properties and secondly to ensure that you have covered all bases in the unlikely event of a dispute with your tenant over the return of the deposit.