FAIR WEAR AND TEAR AND BETTERMENT

It is often the misconception when renting your property, that the property should be returned in exactly the same condition as it was at the start of the tenancy. The matter of fair wear and tear must be taken into consideration.

Fair wear and tear is the gradual deterioration or “damage” which occurs to the condition of the rented property or to its contents, fixtures and fittings through a tenant’s normal and reasonable use.

Wear & tear is defined in case law as follows:

 “Reasonable wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces”

 If an item deteriorates due to wear and tear, then the landlord is responsible for the repair/replacement cost.

If it has deteriorated due to damage then the landlord can pursue the tenant for reimbursement of the partial cost or repair/replacement.

When you assess fair wear and tear at the end of the tenancy you must make allowances for the following:

• Age, quality and condition of any items 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 the tenancy

 A landlord has a duty to adopt the most reasonable and practical and appropriate approach to assessing the remedy.

Appropriate remedies include:

• Replacement of the damaged item if it is either severely and extensively damaged beyond economic repair or, its condition makes it unusable.
• Compensation for diminution in inherent value of the item or the shortening of its useful normal lifespan

For example, should you notice a stain on a rug and as the landlord you decide to replace it, you must only charge the tenant a fair cost towards the replacement as charging the full cost of the rug would be viewed as betterment.

 BETTERMENT

At the end of the tenancy, the landlord is not legally entitled to betterment, i.e. to end up in a better position either financially or materially than they were at the start of the tenancy to the expense of the tenant.

If a damaged item were to be replaced with one of a higher value, this would be considered betterment and any deposit claims that fall under betterment will not be awarded the full cost of replacement.

Landlords should instead apply a proportionate cost, and this is where a betterment formula is very helpful.

A         Replacement cost of asset

B          Age of asset

C         Expected life of asset

D         Expected time before renewal of asset (C-B)

E          Annual depreciation of asset (A/C)

F          Apportioned cost of tenant (DxE)

The principle is that the tenant should only pay a fair cost of cleaning or replacing an asset that is proportionate to the time they spend in the home.

Example, if you find a carpet has been stained then applying the formula above gives the following result:

A         £500

B          2 years

C         10 years

D         C-B = 8

E          £500/10 = £50

F          DxE = £400 cost to tenant

The expected lifespan of the carpet should reflect its condition applying fair wear and tear, such as the number and type of occupants.  You should also keep evidence of the calculation with a copy of the original purchase invoice as this will be important in the event of a dispute with the tenant.

If you are a landlord looking for a letting agents contact our team on lettings@macandmac.co.uk or 01463258002.