Wherever there is room for ambiguity, there is going to be an opportunity for dispute. This is often the case when deciding what should be categorized as typical “wear and tear” vs. what is actual damage to property.
Tenants tend to understate all damage to a property and classify them as “wear and tear.” Landlords, conversely, may take the other extreme by viewing every impact of tenants’ presence in a property as damage. How can you draw a line between damage and “wear and tear”?
Moreover, why does this question matter for property-owners?
- Tenants are only obligated to repair the damage they themselves caused. You would be required to fix normal “wear and tear.”
- The difference between “wear and tear” and damage determines how much of tenant’s security deposit you can keep. The law does not allow you to cover repairs categorized as normal “wear & tear” using the security deposit.
- Knowing the difference will help you avoid disputes with tenants.
- It also allows you to fairly assess damage to a property.
- Finally, it gives you a transparent system for evaluating tenant’s impact on the property.
What is “Wear and Tear”?
This is one of those terms that are often used but hard to define. We use it with the belief that others understand what we mean. But do they?
The Merriam-Webster defines “wear and tear” as “The loss, injury, or stress to which something is subjected by or in the course of use; especially normal depreciation.”
This sounds right until you have to define ‘normal’, as the definition may differ from person-to-person. “Wear and tear” is damage that is expected to occur over time due to the standard use of a property.
Distinctions between normal “wear and tear” and damage
- Normal “wear and tear” is a factor of time; it occurs as a result of the item reaching and exceeding its ‘useful life.’
- Normal “wear and tear” may result from exposure to natural forces; sunlight exposure can cause faded carpets or paint, and time will lead to dust forming on carpet and blinds.
- Normal “wear and tear” comes from using a property in the right way, such as gently worn carpets, light scratching on glass, and watermarked countertops.
- Normal “wear and tear” is expected to happen; it is inevitable.
- Damage is avoidable injury or loss of property; it does not have to happen but is caused by a tenant.
- Damage results from negligence, carelessness or abuse; tenants failing to do what they should or misusing the property. It could also happen by accident.
- Damage is not normal or expected.
- You have the responsibility to fix normal “wear and tear,” but tenants bear the cost for repairing damage.
Examples of normal “wear and tear” vs. damage
To explain the differences further, let us consider two areas where damage is most likely to occur in a property—wall paint and carpet.
How do you separate the common “wear and tear” of using carpets from damage to the carpet? It is normal for carpets to become slightly worn as they near the end of their useful life (5 years). Slight fading due to sun exposure is also expected. This is normal “wear and tear.”
You would replace the carpet to stop it from becoming a tripping hazard. Damage is when the carpet features holes or food and drink stains. If it is torn, extremely frayed, excessively dusty or has evidence of pet urine, the tenant is responsible for those.
Wall paint fades or peels with time and exposure to the sun. It will get scuffed from people living in the space. This is normal and you can’t penalize tenants for this.
If tenants have lived in a unit for over two years, you are obligated to repaint the unit at your own expense. However, if tenants let children draw on the walls, dirty the walls, or there are holes in the paintwork and excessive scuff marks, it is damage. Also, if they use mismatched paint or attempt to paint by themselves and fail, it is damage.
How to determine if a tenant has caused damage
To determine if tenants have caused damage, you should keep a record of the useful life, age and expected depreciation for every fixture and material in a property.
By comparing expected damage against actual damage, you can determine if a tenant has been negligent. To do this fairly and efficiently, there needs to be a firm baseline of the state of the property before the tenant moved in. This would be a record of the property before and after the tenant. Below are the steps for doing this.
Move-in inspection and Move-in checklist
This details the current condition of a property with photographs and notes. It shows any existing damage and is conducted room by room for the entire property. Attaching this to the tenant lease agreement is highly recommended. Without a checklist, it is easy to overlook important aspects of the property during inspection.
Move-out inspection and Move-out checklist
This is the same as a move-in inspection, except that it is conducted after tenant move-out as a record of their impact on the space. Detected damage is noted and photographed.
This is mailed to the tenant, along with the cost of fixing the damage, which is subsequently deducted from the security deposit. Having evidence in the form of pictures makes it hard for a tenant to dispute the damage.
If you haven’t kept up to speed with maintenance of their property, this system may not work. Tenants can claim that your negligence allowed routine maintenance issues to become costly damage. In that case, the tenant is not liable.
Regular maintenance also reduces the chance that a tenant will dispute damage reported in the move-out checklist. This would be because you would have brought those issues to their notice during routine maintenance.
Finally, the only way to fully grasp the difference between damage and normal “wear and tear” is to have a system that captures the purchase/installation dates, useful life, and expected depreciation for every feature of a property. Without these, you will be left second-guessing and setting yourself up for disagreements with tenants.
At Bigham & Associates, we are well-versed in what is normal “wear and tear” versus what is damage. Get in touch with us today if you have any questions. (512) 339-8112