Defining wear and tear
One of the most common causes of disputes between landlords and tenants at the end of a lease is wear and tear. What is it? And who is responsible?
Tenants aren’t liable for the cost of ‘fair wear and tear’. But getting all parties to agree to precisely what constitutes normal wear and tear and what doesn’t is where difficulties and misunderstandings arise.
Broadly, the term applies to parts of the property that would be expected to wear out over time. That is:
• Things that become worn out with ordinary, daily use
• Changes that occur because of weather, like rain or sun
• Normal aging of the property
Carpets are often given as an example of wear and tear. Carpets in highly-trafficked areas of a property can be reasonably expected to wear thin from tenants repeatedly walking back and forth. In such a case, the tenants would not be responsible for the cost of replacing the carpets. However, if the carpets have stains or holes in them, it’s likely the tenants have not cared for them properly, and therefore should bear the cost of replacement.
Other examples of wear and tear include:
• Paint that cracks over time
• Scuff marks on the floor
• Curtains that fade in the sunlight
• Outside weather damage to paint, tiles, pipes and fences
Wear and tear does not include:
• Damage caused by the tenant, like a hole in the wall from moving furniture
• Damage caused by guests, such as a broken window after a party
• Damage caused by pets like stains, scratch marks and smells
Determining fair wear and tear depends on factors like a comparison of the original and final condition reports, how long the property has been occupied, how many tenants have lived there, and the age of the property itself.
The best method of resolving disputes over wear and tear is to make sure the condition report is up-to-date at the start of the lease, and is thoroughly updated at every inspection. All deterioration and damage should be noted and photographed – visuals clearly demonstrate the changing condition of the property over time. Tenants must do their part to keep the condition report up to date, their Property Manager should let them know that if they don’t note wear and tear at every inspection, they will likely be held responsible for the damage.
It also helps to set realistic expectations. Make sure tenants are informed about what constitutes wear and tear, and their responsibilities in regards to the upkeep of the property. Tenants who feel they’ve been treated unfairly are more likely to cause problems by vacating unexpectedly or refusing to pay rent.
It’s important that your Property Manager conducts regular inspections and keeps you the landlord fully informed. It becomes more difficult to determine reasonable wear and tear if you haven’t seen the property for a long period of time. Wear and tear is unavoidable, but staying on top of maintenance and fixing minor issues before they become big problems helps keep the property in the best condition.
Remember that, as a property investor, you can claim tax deductions for wear and tear.
