Property damage can be a property owners worst nightmare, but do you know when it’s damaged and when it’s just fair wear and tear? To start, property owners can’t reasonably expect their property to be in brand-new condition or the same condition after a regular tenancy. Fair wear and tear is part of owning a rental property, while real damage is another story altogether. So how do you tell the difference and what should you do in each situation?
The distinction between ‘wear and tear’ and ‘damage’ is a common cause of tension between property owners and renters. Understanding the difference can help you avoid misunderstandings and disputes and ensure that your property remains in good condition for future renters.
What exactly is ‘Wear and Tear’?
You have probably heard the term ‘fair wear and tear’ in reference to renting a property. Wear and tear simply refers to the normal deterioration that occurs as a result of day-to-day living in a property. This can include things like minor scuffs and marks on walls, worn carpet, worn bench tops, loose hinges or handles, chips or cracks here or there and fading paint.
What is the difference between ‘Fair wear and tear’ and Property damage?
As we’ve mentioned, wear and tear refers to the gradual deterioration or decline in the condition of a property. It occurs over time due to normal everyday use and is a normal and expected part of the ageing process of any property.
On the other hand, damage refers to any destruction or misuse of property beyond what would be considered normal wear and tear. This can include things like broken windows, holes in walls, and severe stains on carpets.
Who is responsible for the repair bill?
Wear and Tear
It’s important to note that fair wear and tear is expected throughout the tenancy and is not the responsibility of the renter to cover the cost of repair or replacement.
Property Damage
Responsibility for any damage resulting from the actions of a renter, their children, pets, or their guests falls squarely on the renter, who are obligated to cover any associated repair or replacement costs.
If a renter fails to repair the damage caused the cost can usually be deducted from their bond.
How can you determine the difference?
Determining whether something is fair wear and tear or damage is not always straightforward. There are a number of factors to consider, including:
Age of the property: An older property may have more wear and tear, and things like peeling paint may be considered fair wear and tear.
Length of the tenancy: The longer a tenant has lived in a property, the more wear and tear can be expected. However, this does not give the tenant the right to cause damage.
Intentional actions: If a tenant intentionally damages an item or area of the property, it is clearly classed as property damage. For example, a hole in the wall or a smashed windo would not be considered fair wear and tear.
Negligence: If a renter fails to take reasonable care of the property and causes damage as a result, it is considered damage. For example, spilling red wine on the carpet and not cleaning it up properly, causing a stain, is not fair wear and tear.
What about Accidental Damage?
The definition of accidental damage refers to damage that arises suddenly due to an unexpected and non-deliberate action. This could include something like a pet chewing on a skirting board or a ball smashing a window. Accidental damage is still classified as damage which the renter is responsible for.
How to avoid disputes about wear and tear vs property damage
Preventing disputes with your renters can be achieved by maintaining a detailed record of the property’s condition at various points throughout the tenancy. The Condition Report takes care of this and is conducted at the start of the lease, via routine inspections throughout the lease, and at the end of the lease.
It is crucial to document any instances of damage through photographs or videos when inspecting the property and keep these records as part of a comprehensive condition report.
The reports not only serve as evidence in the event of disagreements over fair wear and tear but are also required as supporting documentation if you’re seeking to make an insurance claim for tenant-caused property damage.
Does Landlord Insurance cover wear and tear or property damage?
Wear and Tear – Since wear and tear is a natural part of a property’s depreciation, it is not typically covered by landlord insurance. Insurers view reasonable wear as distinct from damage, and this is usually outlined as an exclusion in the policy’s Product Disclosure Statement (PDS).
Property Damage – In the event that you are unable to recover the costs of repairing or replacing damaged property from your renter then landlord insurance may be able to provide coverage for these expenses depending on the type of cover you have.
It can sometimes be a ‘grey area’ but it doesn’t have to be.
It is nearly impossible for renters to avoid causing some level of wear and tear to a property, such as worn-out carpets in heavily trafficked areas, scuff marks on walls, and minor scratches here and there. These types of wear and tear result from the normal, everyday use of the property as a home to live in.
Ensuring regular property inspections and condition reports are completed to keep an accurate record of your property will go a long way to helping you tell the difference between wear and tear vs property damage.
A few examples below
