Wear & Tear Explained
Wear & tear is a term commonly used when renting a property. There is a difference between wear & tear and damage to a rental property. This could often become an issue faced by many tenants, landlord and agent during the end of a tenancy. In a normal situation, tenants are expected to return the property to the same condition it was in at the start of the tenancy. Fair wear and tear should be considered when assessing the condition of the property.

What is considered Fair Wear and Tear?
While a good tenant attempts to look after a property with care, there is always a process of slow deterioration over time simply because the property is lived in. There is a fine line between the different types of damage and it is always recommended that any kind of damages are documented.

Landlord is responsible for maintaining a rental property. However, there is a certain amount of deterioration that may occur as property ages. Normal use and ageing may affect the condition of a rental property over time and this is known as wear and tear. Neither the landlord nor the tenant is responsible for a deterioration.

Damage done to a property does not fall into a wear and tear. The person responsible for causing a damage is responsible for the repair. A landlord cannot make financial claim for fair wear and tear, but a landlord can make a claim for damages to the property.

So, what is wear and tear?
According to NSW Fair Trading, wear and tear means the normal deterioration of a property from ordinary, everyday use and it naturally occurs over time. It typically also results from day-to-day use of the property, like walking on a high traffic flooring area and use of a kitchen benchtop.
It also can simply be the result of the property aging and being exposed to natural forces, such as gutters rusting from rain or timber window frame fades in the sun.

In summary, Wear and tear is something that just happens over time with normal use of the property – something that has not been caused intentionally, or by misuse or abuse.
Because wear and tear are expected and considered normal depreciation, it is not covered by landlord insurance. A tenant cannot claim fair wear and tear when they have been negligent or when damage was caused by something done intentionally.

Here are some common occurrences of wear and tear that landlord are responsible for and not covered by insurance:

• Faded curtains or frayed cords
• Furniture indentations and traffic marks on the carpet
• Scuffed up wooden floors
• Faded, chipped or cracked paint
• Worn kitchen benchtop
• Loose hinges or handles on doors or windows and worn sliding tracks
• Cracks in the walls from movement
• Water stain on carpet from rain through leaking roof or bad plumbing
• Worn paint near light switches
• Color of carpet or hardwood fading due to exposure to sunlight
• Dirty grout or grout discolouration due to age
• Bathroom mirror discolouring and warping due to age
• Loose door handles
• Silver finish on bathroom fixtures beginning to wear away

And what is damage?
Damage is a result that is caused by a person and not by ageing. It is typically the result of negligence, carelessness or abuse. This can be an unintentional one-off incident that harms either the property or its contents.

In terms of home insurance, a reasonable interpretation of the word damage includes not only physical damage to an item, but also something that resulted in a loss of function. For something to be considered accidental, it must be sudden and as a result of an external, visible and violent cause.
It is important to know that many home insurance policies will not cover damage caused by chewing, tearing or scratching by animals.

Insurers generally recognise three types of tenant damage: 

1. Accidental – the result of sudden, unexpected or unforeseen events (such as wine spilled on carpets).  
2. Malicious – caused on purpose with intent to do harm, motivated by vindictiveness or spite with the aim of damaging the property (such as punching a hole through a door).
3. Intentional – the result of an act carried out without permission but without malice, and with the full knowledge the action will alter the current state of the property (putting picture hooks in walls or painting a wall a different colour).
   
   Here are some examples of damage that a tenant may be liable for:

• Missing curtains or curtains torn by a pet
• Pet urine throughout the property
• Stains or burn marks on the carpet
• Badly scratched or gouged wooden floors
• Unapproved or poor-quality paint job
• Burns or cuts in bench top
• Broken glass through a window
• Holes in walls left by tenants removing picture hooks or shelves they had installed
• Water stains or carpet caused by overflowing bath or indoor pot plants
• Paint damage resulting from removing decorations stuck with Blu-Tac or sticky tape
• Smashed, broken or cracked bathroom mirrors
• Severely broken toilet seat
• Hole in the middle of a door
• Damaged or missing door handles/locks
• Chipped or broken tiles

Who is responsible?

Fair wear and tear can be considered as a cost of an investment property. This may include repairing or replacing worn fittings and fixtures.

Unless a contract states otherwise, tenants are not responsible for paying for fair wear and tear to a property. It is only when the tenant has been irresponsible, and accidentally or intentionally caused damage to a home that they are liable to compensate for repairs either directly or have the expense deducted from their bond.

Proving Fair Wear and Tear

Disagreement between wear and tear and damage frequently occurs between landlord and tenant. That is why it is important to make sure all conditions of the premises are well documented and updated at the time of moving in, during inspections and upon moving out.
Thorough inspection condition reports with detailed photos and video are very useful to avoid disputes. It is in the best interest of both tenant and landlord to ensure that these reports are complete and signed. With a bit of care, consideration and proper documentation, you can avoid crossing the line from fair wear and tear to damage and facing a potential bond dispute.

How to Avoid Disputes 

One of the best ways to avoid disputes is to ensure your property manager or yourself carries out periodic inspections of your investment property to ensure it is being well cared for and any routine repairs are being made. Each state or territory has a different allowance around the number of inspections per year. 

These inspections should address the following:

• The lease terms are being honoured
• The property is being maintained in a clean and tidy condition
• The property is not being damaged in any way
• There are no more than the number of people specified on the tenancy agreement living at the property
• No pets allowed at the property, unless otherwise agreed to

Specific for the landlord, another way to avoid dispute is by carefully understanding the insurance policy’s product disclosure statement. Some policies will not provide cover if the tenancy has moved to a periodic lease. Whereas other policies may reduce claims by depreciation of fixtures and fittings.

Knowing what is in the fine print of the insurance policy and passing on to the tenant what will and won’t be covered eliminates the possibility of later dispute. If the landlord is upfront about insurance coverage, then the tenant can’t argue that they weren’t properly informed.

The bottom line

Disagreements about wear and tear versus damage frequently occur between landlords/agents and tenants. It is important to make sure the condition of the premises is well documented and updated at the time of moving in, during inspections and upon moving out.

Here are the broken-down list per location:

Wall and Ceiling
WEAR & TEAR

• Plaster cracking as the building settles
• A small number of scuffs and tiny marks
• Fading paint due to sun damage
• Worn paint around light switches

DAMAGE

• Holes left behind by picture hooks
• A Sharpie homage to Picasso left by the tenant’s child
• Large holes, scratches, and scuffs
• Unapproved, poor quality paint jobs
• Paint damage left from Blue-Tack
• Smoke damage from cigarettes being smoked inside or from candles placed too close to a wall

Carpet
WEAR & TEAR

• Worn down carpet in high-traffic areas such as hallways
• Discolouration due to sun damage
• Fraying or tearing at the edges if the carpet is older than 5 years (the natural lifespan of most carpet)
• Water stains if there had been a reported leak during tenancy
• Furniture indentation

DAMAGE

• Large stains
• Pet damage
• Burn marks
• Water stains from preventable incidents such as an overflowing sink or a pot plant
• Red wine or coloured drinks or beer spilled to the carpet

Hardwood Floors
WEAR & TEAR

• Small Scuffs
• Discolouration from sun damage

DAMAGE

• Furniture indentations (your tenants should be putting rugs or pieces of carpet underneath heavy furniture on hardwood floors)
• Pet damage
• Water damage from indoor plants
• Deep scratches

Bathroom
WEAR & TEAR

• Silver finishings wearing away
• Grout discolouration due to age
• Mirror discolouring and warping due to age

DAMAGE

• Chipped or broken tiles
• Broken or cracked mirrors

Windows
WEAR & TEAR

• Loose hinges
• Worn sliding tracks
• Light scratches

DAMAGE

• Smashed windows (excluding breaks caused by storm damage which should always be reported as soon as they occur so they can be replaced immediately)
• Ripped screens
• Cracked panes from slamming windows shut

Other little things
WEAR & TEAR

• Garden mulch breaking down over time
• Light scratches and marks on countertops
• Loose door handles
• Faded or frayed curtains

DAMAGE

• Gardens dug up by pets
• Deep scratches from cutting directly onto countertops
• Burns on countertops
• Missing handles or locks
• Curtain or blinds damage caused by cats