Leasing: Damage vs Fair Wear and Tear

Property damage can be a Landlord’s worst nightmare, but do you know when it’s damage and when it’s just fair wear and tear? We break down the difference.

To start, property investors and landlords can’t reasonably expect their property to be in brand-new condition or in the exactly the same condition after a regular tenancy. Normal 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? Below, we’ve outlined our views.

Keep in mind that there can be a big difference between short-term and long-term leases because of different expectations and legal framework. Get in touch if you’re looking for short-term info specifically.

What is fair wear and tear in a rental property?

As a general rule, damage that happens through ordinary or expected day-to-day use of the property is classified as fear wear and tear. It might come about from repetitive operation (like walking over the same section of flooring multiple times a day), natural forces like wind, sun or rain, or from items that just naturally deteriorate over time.

A key word in the description of this type of property deterioration is “fair” – is it reasonable that the problem has just happened as part of normal life? If yes, it’s probably just wear and tear. You’ll find this level of damage in most, if not all, tenancies.

Examples of normal or “fair” wear and tear includes (but certainly not limited):

  • Any damage caused by natural forces, like broken windows from storm activity or faded curtains from sun exposure
  • Worn or stained flooring in high-traffic areas
  • Faded, chipped or cracked paint
  • Aged curtains or frayed cords (including furniture indentations)
  • Worn kitchen bench tops
  • Worn sliding tracks on windows and doors or worn seals on appliances
  • Appliances breaking down
  • Small tears in fly screen
  • Light scratches or scuff marks on walls
  • Loose taps, faucets and toilet seats

What is classified as damage in a rental property?

On the other hand, actual “damage” happens out of negligence or malicious intent from the Tenant. So, it covers everything that the Tenant damaged on purpose, as well as anything accidental that could have been prevented with common sense or caution. So here’s an important thing to note: it’s not just “bad” Tenants that cause damage. It can be common with good Tenants too, especially in the case of an accident.

This type of damage is more problematic for Landlords, because it’s often worse than wear and tear, so it’s more expensive to fix. It also tends to be a bit more spread out across the property, or come coupled with other types of damage, instead of just being a few worn pieces here and there. If someone is careless in one area, there’s more of a chance they’ll be careless in others too.

Damage includes:

  • Broken windows resulting from the Tenant hitting it accidentally
  • Burnt kitchen bench tops from a hot pan or dish
  • Broken appliances from negligence, like a dishwasher clogging from dishes not being rinsed and causing flood
  • Power surge from too many appliances plugged in
  • Holes in the wall left from pictures/paintings 

How should Landlords approach damage and wear and tear?

First things first, regular inspections are a must for identifying any problems with the way the Tenant is treating the home, or to check for any minor wear and tear issues that could balloon into a much bigger damage problem down the track. For properties with pets or kids, it can be a good idea to inspect more regularly but be careful that you are following the guidelines.  If you are not receiving regular routine inspection reports from your property manager, you have every right to request them to be done or it or find another agency.  Catching things early is critical if you are to have any hope of recuperating repair or replacement compensation. 

Second,  a good Tenant is another opportunity to lower your risk of real damage, so make sure your property manager is checking references thoroughly and getting a great Tenant who will take pride in the property.

Third, Property Providers recommends that all Landlords invest in proper insurances to protect their asset from all types of unforeseen circumstances.

Remember…

Normal wear and tear happens in any property – no matter how perfect the home or the Tenant.  

But if prevention doesn’t work, know your rights for claiming compensation when damage occurs. You can take the cost of the damage out of the Tenant’s bond when they leave, or make a claim for the cost and lost rental income if applicable.  These situations may frustrate or anger a Landlord, it is almost always best to negotiate an amicable and acceptable solution with the Tenant.  Landlords often want to rush to file an application with NCAT to get the resolution that they are looking for however, property investors should be cautious before doing so as the legislation is undeniably in the Tenants favour (and increasingly so).

Do you have a problem with damage in your investment property? Get in touch with us today.

At Property Providers our core purpose is “Helping People Live Better”.  As Sydney’s most flexible residential rental agency we are totally focused on Property Management and renting “Your Property, Your Way”. We have designed 6 different rental services covering all facets of Long-Term Leasing as well as Short-Term Stays. Unlike franchise real estate agencies, we see the value in pragmatism and flexibility. Whether you want to rent your property furnished or unfurnished, for 6 months or 5 years, we will manage your property, your way. Our bespoke marketing strategies deliver discerning international Tenants that understand quality and are prepared to pay for it.  If you would like to learn more please visit our website  or call us on +612 9969 7599

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General Advice Warning: The information in this article is of a general nature only and does not take into account your particular circumstances. Any financial, legal or other matters in this information is based on Property Provider’s interpretation of the existing law at the time and should not be taken as constituting professional advice. Property Providers and its officers and agents has taken every effort to ensure the accuracy of this information and disclaims all liability (except for the liability which can’t be excluded by law) for any error, omission, inaccuracy or loss or damage suffered by any person directly or indirectly through relying on this information. If you’d like to know more about licences and leases and which might be appropriate for your property arrangements with your guests, please contact Don Binkley and the Property Providers team on +612 9969 7599.