What is fair wear and tear?
So when you assess fair wear and tear at the end of the tenancy you must make allowances for the:
- Age, quality and condition of any item at the start of the tenancy
- Average useful lifespan of the item
- Reasonable expected usage of such an item
- Number and type of occupants in the property
- Length of tenancy
Betterment and apportionment
To avoid betterment, you must consider apportionment. If damage exceeds fair wear and tear, you must avoid improving upon the value of the property (betterment). Landlords are not entitled to end up financially or materially better off once a tenancy ends.
Any tenancy deposit deductions must consider fair wear and tear and whether repair or replacement is the most appropriate remedy. The cost of the remedy must then be appropriately divided between you and the tenant (apportionment).
Replacing a carpet
Example: a 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 cost should be split between you and the tenant, so if a new carpet is £500 this should be apportioned as £450 to you and £50 (cleaning cost) to the tenant.
Example: 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 be to replace the carpet. However, charging the tenant the full replacement cost is unfair so you must apportion the cost to the tenant.
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 your property.
| A | The replacement cost of similar carpet | £500 |
|---|---|---|
| B | Age of carpet | 2 years |
| C | The expected lifespan of the carpet | 10 years |
| D | The remaining lifespan of carpet (C – B) | 8 years |
|---|---|---|
| E | Annual depreciation (A ÷ C) | £50 per year |
| F | The apportioned cost to the tenant (D x E) | £400 |
The expected lifespan of the carpet should reflect the conditions outlined under fair wear and tear, such as the number and type of occupants. You should keep evidence of the calculation with a copy of the original purchase invoice and explain how the expected lifespan of the asset was calculated (e.g. manufacturer's guarantee). This is important in the event of a dispute with the tenant.
Complete an inventory
To help you assess whether any damage is in excess of fair wear and tear, an inventory check should be completed and agreed upon with the tenant at the start of the tenancy. The inventory should document the items' condition with photos to prove this, which you can then compare at check-out.
You should also keep receipts for all the items that you have purchased or invoices from any work you have done. This will count as proof of age and help you cover all bases should you get into a deposit dispute with your tenant.
PHIL SPENCER, MOVE iQ
PHIL SPENCER, MOVE iQ
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