What Is "Fair Wear & Tear" On A Rental Property?
You will often hear our team use this phrase, particularly when conducting the check-out process at your property. When negotiating on a tenants deposit, our team need to allow for a certain amount of fair wear and tear.
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”. The word ‘reasonable’ can be interpreted differently, depending on the type of property and who occupies it. In addition, it is an established legal principle 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. landlords should therefore keep in mind that the tenant’s deposit is not to be used like an insurance policy where you might get ’full replacement value’ or ’new for old’.
The landlord also has a duty to act reasonably and not claim more than is necessary to make good any loss. For example:
- Replacement of a damaged item may be justified where it is either severely and extensively damaged beyond economic repair, or its condition make it unusable;
- Repair or cleaning is a more likely where a replacement cannot be justified;
- In cases where an item has had its value reduced or its lifespan shortened, for example by damage, an award of compensation may be appropriate
In order to avoid allegations of betterment by the tenant, any award for damage must take into account fair wear and tear, the most appropriate remedy, and that the landlord should not end up either financially or materially in a better position than he was at commencement of the tenancy or as he would expect to be at the end of the tenancy.
How do you determine what is fair wear and tear?
This means making an allowance for:
- 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
The calculation for fair wear and tear is not a science it is an art form and a good letting agent will be able to justify how and why they have placed a monetary value on dilapidated fixtures and fittings in a property after the check- out process has taken place. Here is an example taken from the Deposit Protection Service (DPS) website under ‘Tenancy Deposits, Disputes and Damages’:
- Cost of similar replacement carpet/item = £500
- Actual age of existing carpet/item = 2 years
- Average useful lifespan of that type of carpet/item = 10 years
- Residual lifespan of carpet/item calculated as ‘3)’ less ‘2)’ = 8 years
- Depreciation of value rate calculated as ‘1)’ divided by ‘3)’ = £50 per year
- Reasonable apportionment cost to tenant calculated as ‘4)’ times ‘5)’ = £400
More information can be found by downloading this document provided by the DPS.