When renting out an investment property, understanding the difference between fair wear and tear and tenant damage is crucial. It ensures landlords and tenants know their rights and responsibilities when it comes to maintenance and repairs.
Many investors wonder: What is reasonable wear and tear? What constitutes tenant damage? Who is responsible for repairs?
In this guide, we'll clarify these distinctions, provide examples, and explain how landlords can ensure a fair resolution at the end of a tenancy.
What Is Fair Wear and Tear?
Fair wear and tear refers to the natural deterioration of a rental property over time due to normal use. It happens gradually and is not caused by negligence, misuse, or accidental damage.
Examples of Fair Wear and Tear
- Carpets: Furniture indentations, fading, or slight traffic marks.
- Curtains and Blinds: Sun-faded fabric or frayed cords from regular use.
- Floors: Light scuff marks on wooden flooring from foot traffic.
- Walls and Paint: Faded, chipped, or cracked paint due to age.
- Kitchen Benchtops: General wear from daily use.
- Doors and Windows: Loose hinges, handles, or worn sliding tracks.
Who Is Responsible for Fair Wear and Tear?
The landlord is responsible for maintaining and repairing issues that arise from fair wear and tear. Tenants cannot be held accountable for natural deterioration and are not expected to cover these costs.
What Is Tenant Damage?
Tenant damage refers to harm that occurs due to negligence, misuse, or intentional actions. Unlike fair wear and tear, these issues are avoidable and require tenants to take responsibility.
Examples of Tenant Damage
- Carpets: Stains, burn marks, or pet damage.
- Curtains and Blinds: Torn or missing curtains, pet scratches.
- Floors: Deep scratches, gouges, or broken tiles.
- Walls and Paint: Holes from hanging pictures, poor-quality paint jobs.
- Kitchen Benchtops: Burns or deep cuts from improper use.
- Doors and Windows: Broken glass or forcefully damaged frames.
Who Is Responsible for Tenant Damage?
The tenant must repair or pay for damages they or their guests cause. If an issue is identified during the final inspection, tenants may have to arrange for repairs or compensate the landlord.
How to Determine Fair Wear and Tear vs. Damage
1. Conduct an Ingoing Inspection Report
Before a tenant moves in, a detailed ingoing inspection report should be completed, outlining the property's condition. This report includes written descriptions and photographs of:
- Walls, floors, and ceilings
- Carpets and tiles
- Fixtures and fittings (blinds, cupboards, kitchen benchtops)
- Doors, windows, and locks
This document is crucial in determining whether any changes to the property at the end of the tenancy fall under fair wear and tear or tenant damage.
2. Perform Routine Inspections
Regular property inspections help track the condition of the rental. If tenants report issues or if problems are noticed early, landlords can address them before they escalate.
3. Compare the Final Inspection to the Initial Report
At the end of the lease, the vacate inspection compares the property's condition to the original ingoing report. If damage beyond reasonable wear and tear is found, landlords can request compensation.
How Can Landlords Seek Compensation for Damage?
If a tenant has caused damage, landlords have options to recover costs:
- Request Repairs or Replacement – Tenants may organise professional repairs before moving out.
- Use the Rental Bond – If the tenant does not fix the damage, landlords can claim repair costs from the bond.
- Seek Partial Compensation – If a carpet, for example, is damaged but does not require full replacement, compensation can be calculated based on the area affected.
- Negotiate a Resolution – In some cases, landlords and tenants can agree on a reasonable settlement without escalating to formal disputes.
What If There's a Dispute?
If there is a disagreement over fair wear and tear versus damage, the NSW Civil and Administrative Tribunal (NCAT) can help resolve the issue. Both parties will need to provide evidence, such as inspection reports and photos, to support their case.
Tips for Tenants to Avoid Disputes
To ensure a smooth tenancy, tenants should:
✓ Report Issues Promptly – Inform the landlord about maintenance concerns before they worsen.
✓ Clean Regularly – Prevent stains, dirt buildup, and other avoidable damage.
✓ Use Fixtures Properly – Avoid rough handling of blinds, doors, and appliances.
✓ Seek Permission for Modifications – Do not paint or drill holes without approval.
✓ Document Property Condition – Take photos upon move-in and report pre-existing issues.
Final Thoughts
Fair wear and tear is an expected part of property investment, but landlords must differentiate between natural deterioration and tenant-caused damage. By conducting thorough inspections, keeping records, and maintaining open communication with tenants, landlords can ensure their property remains in good condition while upholding their rights.
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