Wear and Tear in the PRS 1st Aug 2016
As discussed in the accompanying newsletter article on the Private Rented Sector (PRS), new research has revealed that the PRS is now the biggest form of tenure after home ownership. And it is predicted that growth is going to treble over the next 5 years (Knight Frank).
It has also been found that the average length of a tenancy has increased by 300% over the last 2 years from 16 months in 2014 to 4 years in 2016 (Imfuna). Longer tenancies will of course result in more wear and tear, and more damage to a property.
Disputes between landlords and tenants over who pays for what are on the rise, with the latest figures from the Tenancy Deposit Scheme showing that damage now accounts for 52% of all adjudications. This is largely due to confusion around ‘damage` verses ‘fair wear and tear`, and whether the landlord or the tenant is responsible for footing the bill. Tenants are also more aware now of the deposit dispute process and so are more willing to fight their corner in a dispute.
A tenant cannot be held responsible for fair/reasonable wear and tear - ‘reasonable wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces’. In other words, a tenant cannot be charged – or have anything deducted from their deposit – for damage that would have inevitably occurred as a result of the property being inhabited. This is wear and tear. Actual damage is considered to be destruction which could have been avoided, and is more than just a result of use – for instance a burn in the carpet or a broken window pane.
The tenant has a duty of care to return their rental property in the same condition as they found it at the start of the tenancy, and as stated on the inventory, with the allowance for wear and tear. This is why it is essential that a detailed inventory is carried out at the start of the tenancy showing the condition of the property prior to the tenants moving in – you are highly unlikely to get any money back from a tenant’s deposit for damage without an inventory.
As discussed in our May Newsletter, the law does not allow for betterment, or ‘new` for ‘old` - landlords are not entitled to be compensated so that the property can be improved at the tenant’s expense. The landlord may be entitled to some costs if there is damage, however the cost of replacement may not be down to the tenant in full, as deductions must be reasonable and proportionate to the damage attributable to the tenant which is in ‘excess of fair wear and tear’.
An example of this would be damage to a carpet. The cost of a new similar replacement is £500, however the actual carpet is 2 years old. The average lifespan of a carpet is 10 years old, and therefore the residual lifespan is 8 years. The depreciation of the carpet is worked out as the cost of the new replacement (£500) divided by the average lifespan (10 years) which equals £50 per year. The reasonable apportionment cost to the tenant is therefore the residual lifespan (8 years) times this £50, which is £400.
The Key Place uses bespoke inventory software to provide detailed and accurate inventories embedded with photographs at the start of the tenancy. We then use the same software at our inspections to record the condition of the property during the tenancy, and the same software at check out. This allows us to have an accurate, documented, side by side comparison that can be used if there is any dispute over the deposit at the end of the tenancy.
The following advice may be helpful, showing what the landlord and tenant can expect:
- It is expected that a landlord will emulsion walls and ceilings every 2-5 years. Areas in use more often such as hallway / landing / stairs / kitchen / bathroom should be painted approx. every 2 years, less used rooms such as a dining room may need painted less frequently.
-Budget carpets should be replaced every 2-3 years; medium quality every 4-8 years; high quality up to 15 years.
- Certain items may require to be replaced every tenancy, such as budget crockery, cutlery, pots and pans, ironing board covers etc. If crockery is damaged the deposit scheme will expect the landlord to replace it rather than the tenant. Landlords must ensure all fixtures, fittings and furnishings provided are in a reasonable state of repair and in good working order. Any item recorded on the inventory provided as part of the tenancy must be repaired or replaced if needs be.
- General maintenance issues such as repairs to bath seals, sinks, pipework etc should be seen to by the landlord between tenancies, or during the tenancy if needs be.
- Repairs to the structure and exterior of the property are the landlord’s responsibility, for example, the walls, roof, foundations, drains, guttering and external pipes, windows and external doors. The property must be wind and water tight, and meet Repairing Standard criteria.
- Repairs to water and gas pipes, electrical wiring, water tanks, boilers, radiators, gas fires, fitted electric fires or fitted heaters are a landlord’s responsibility.
- Repairs to communal areas fall to property owners.
- Landlords must ensure all safety certificates are up to date.
Landlords must not pass the cost of any repair work that is their responsibility on to tenants.
- The property which includes the contents and the exterior must be kept to the standard found at the start of the tenancy, and as noted on the inventory at the start of the tenancy.
- The tenant is responsible for keeping the property clean and tidy, and not causing any damage to it. If tenants or any of their visitors cause any damage to the property, then they will be liable for fixing the damage. For example, if the carpet is getting a little worn, this will be seen as wear and tear. If a hole is burned in it, this is damage and the tenants will be liable for putting this right.
- The tenant is responsible for thoroughly cleaning the property at the end of the tenancy. This is assuming the property was clean at the start of the tenancy. Tenants are expected to clean properties to a professional standard – this does not mean they are required to get professional cleaners in. If tenants do not leave a property clean, money can be retained from the deposit to cover this.
- If items are broken or light bulbs blown these will need to be replaced.
- Tenants are responsible for using all fixtures and fittings properly (eg, not blocking a toilet by flushing anything unsuitable down it).
- Tenants are responsible for heating the property adequately, particularly during winter to avoid frozen and burst pipes, and making sure it's kept well ventilated, to help avoid condensation and dampness.
- If tenants wish to make any changes or improvements (including redecoration) to their home, they must get permission first. They should speak to the letting agent who will follow it up with the landlord.
Letting agents act as an intermediary between tenant and landlord, helping to resolve any disputes before they get out of hand. Disputes are common, and are on the increase. Landlords who use a letting agent can sit back and relax, knowing that the letting agent is dealing with all of this for them. Choose a letting agent who is a member of a registered body, such as the Council of Letting Agents, and Landlord Accreditation Scotland. The Key Place is a member of both and adheres to their policies.