How do Landlords know what is Fair Wear and Tear?
As with many landlords assessing fair, wear and tear can be difficult especially when many landlords believe that the property should be returned to them in the same condition as at the start of the tenancy. As the landlord you are not entitled to betterment (to end up in a financially or materially better position) from when you start the tenancy to at the end of the tenancy.
At the end of any tenancy any actual damage must be considered carefully and any proposed deductions from the tenant’s deposit must be reasonable and in proportion above excess of fair wear and tear. Ensure you have covered all the bases in the event of a deposit dispute with your tenant, collect evidence prior to the start of the tenancy and regular property inspections can guide you when assessing tenants care of the property. At the end of the tenancy collect further evidence and assess for reasonable costs of any damage.
Fair wear and tear means that you must make allowances for:
•The age, quality and condition of any item at the start of the tenancy
•The average useful lifespan of the item
•The reasonable expected usage of such an item
•The number and type of occupants in the property
•The length of tenancy
The best calculation or Betterment Formula.
The following formula considers the value and lifespan of the carpet and splits the purchase cost over the lifespan. The same formula can be applied to other items in the property.
A Replacement cost of similar carpet £500
B Age of carpet 2 years
C Expected lifespan of carpet 10 years
D Remaining lifespan of carpet (C – B) 8 years
E Annual depreciation (A ÷ C) £50 per year
F Apportioned cost to tenant (D x E) £400
AN EXAMPLE – Stain on the carpet – Repair
If the cost to clean the carpet is £50 but you decide to have a new carpet, you cannot lawfully charge the tenant for the full cost of a new carpet. The costs should be apportioned and shared between you and the tenant. If the cost of a new carpet is £500 this should be apportioned as £450 to you and £50 (cleaning cost) to the tenant.
EXAMPLE 2 – Severe damage to carpet – Replace
If the damage to the carpet is so extensive it affects the quality of the property and achievable rent, the most appropriate remedy will likely be to replace the carpet. However, charging the tenant the full replacement cost is unfair, so you must apportion the cost to the tenant.
The expected lifespan of the carpet should reflect the conditions outlined under fair wear and tear such as number and type of occupants. Back up the calculation with a copy of the original purchase invoice and an explanation of how the expected lifespan of the asset was calculated, you will need this in the event of a dispute.
A professional letting agent has experience when negotiating with tenants before disputes are presented further which leads to a good success in agreeing deposit returns before disputes are presented. Presenting a deposit dispute to an adjudication officer is as if you are presenting a court case.
Landlords be prepared to cover the cost beforehand to re let your property before receiving a deposit return factor in the time and money involved. A solicitor maybe required to sign your statement of declaration on single claims which will cost. Professional letting agents have a standard practice of collection of evidence and can present cases for landlords in the manner required. They have a good success rate of winning cases from experience and knowledge and if you employ an agent to manage your property, they will present this for you as part of their service although there maybe additional charges to cover costs.