At the end of a tenancy, you may believe that your rental property should be returned to you in the exact same condition as it was at the start of the tenancy - this is not the case!
As the landlord, you’re not entitled to end up financially or materially better off than you were at the start of the tenancy or would have expected to be at the end of the tenancy.
Why? Because of fair wear and tear.
There aren't any definitive rules on what is meant by fair wear and tear, however, it can be explained as the deterioration or 'damage' that happens to the property and its contents, fixtures and fittings by the tenant through normal and reasonable use.
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
- 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
To help you assess whether any damage is in excess of fair wear and tear an inventory check should be completed and agreed with the tenant at the start of the tenancy. The inventory should document the condition of the items with photos to evidence this which you can compare at check-out.
You should also keep receipts for all the items that you have purchased or invoices from any work you have had done at the property for proof of age this will help you cover all bases should you get into a deposit dispute with your tenant.
Avoiding Betterment and Considering Apportionment
If there is any damage that exceeds fair wear and tear you must try to avoid betterment, as mentioned at the start of this guide landlords are not entitled to end up financially or materially better off once a tenancy ends.
Any tenancy deposit deductions you take for damage must consider fair wear and tear and whether a repair or replacement is the most appropriate remedy for the item.
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 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.
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.
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 |
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 number and type of occupants. You should keep evidence of the calculation with a copy of the original purchase invoice and a explain how the expected lifespan of the asset was calculated (e.g. manufacturers guarantee), this is important in the event of a dispute with the tenant.