Many landlords believe that the property should be returned to them in the same condition as at the start of the tenancy however this is not the case. As the landlord you are not entitled to end up in a financially or materially better position than you were at the start of the tenancy or would expect to be at the end of the tenancy.
At the end of the tenancy the most appropriate remedy to damage must be considered and proposed deductions must be reasonable, proportionate and in excess of fair wear and tear. You should aim to limit wear and tear throughout the tenancy by carrying out inspections and ensure you have covered all bases in the event of a deposit dispute with your tenant.
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
Avoiding Betterment and Considering Apportionment
To avoid betterment the allocation or apportionment of any compensation for damage must consider the factors relating to fair wear and tear and the most appropriate remedy.
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.
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 |
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 |
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.