Wear-and-tear vs. Damage: What’s the Difference?
When you own a rental property, you expect that your tenants will treat the place as if it were their own, taking care to not cause damage beyond normal wear and tear. The question is, though, what does normal wear and tear mean? Obviously, over time, appliances, walls, floors and fixtures will become worn and need cleaning and updating or replacing, but as a property owner, how do you make the judgment that damage is more than just what comes from typical everyday usage?
Determining the difference between wear and tear and damage is especially important when it comes to determining who pays for cleaning or repairs. If you collect a security deposit from your tenants, you need to be able to make a solid case for retaining some or all of the money when tenants move out, and that’s where having a clear definition is important.
Defining Wear and Tear
In any property, there will be a gradual breakdown of the space. The longer the items have been in place, the more reasonable it is to expect that there will be deterioration. No matter how well the property is maintained, aging is inevitable, and it’s unreasonable to expect carpets, floors, walls, appliances and other parts of the home to remain pristine year after year.
Therefore, as a landlord, it’s important to expect a certain amount of wear and tear on your property and understand that you cannot hold a tenant responsible for it. Some examples include a minor scratch or two on a wood floor, worn out carpeting, faded paint, loose wallpaper in corners or damage to flooring underneath appliances. It’s also important to understand the factors that go into determining wear and tear. Older buildings, for example, are typically subject to more deterioration than newer ones, and some damage can simply be chalked up to the age of the property; for example, issues with windows and windowsills are often caused by the settling of the foundation.
A determination of wear and tear is also influenced by the extent of the damage and how long the tenant lived in the property. After 10 years, it’s reasonable to expect that the carpet will need to be replaced; after six months, a carpet that was relatively new at move-in should not need to be replaced. By the same token, it’s reasonable to expect a ding or dent in the wall here or there; if there are large holes or excessive damage from nails, furniture or carelessness, then that isn’t reasonable wear and tear.
Most lease agreements note that tenants will only be responsible for damage that results from negligence, carelessness, abuse or accidents. Sometimes, issues that would have been wear and tear become damage due to negligence on the part of the tenant. For example, if an appliance isn’t working correctly, and the tenant fails to notify the landlord, then damage caused by the malfunction may be considered damage, as it could have been prevented.
Basically, the litmus test for damage vs. normal wear and tear is whether or not it was caused by the tenant and whether it could be prevented. It’s normal for carpets to have worn spots, but if the carpet is heavily stained, ripped, or damaged by wine, then that’s excessive and considered damage. It’s also reasonable to deem unauthorized changes to the property, such as painting walls or changing the flooring, as damage, especially if you have to repaint or restore the property to its original condition.
The Special Case of Appliances
While walls and floors tend to receive the brunt of abuse when it comes to rental properties, appliances also tend to need regular repair and replacement. The lease should clearly spell out who has responsibility for maintaining and repairing appliances and what constitutes damage that needs to be covered by the tenant.
One way that landlords can save money on appliances is by investing in the best home warranty plan for their properties, which will cover most of the expenses related to normal wear and tear on appliances. With a home warranty, landlords can schedule repairs on appliances and replace them inexpensively when they break down due to age or faulty components. Because home warranties do not cover repairs due to damage, it becomes easier for landlords to decide when tenants should be responsible for covering the cost of the broken appliances.
At the end of the day, determining whether your property’s damage is due to tenant damage or normal wear and tear is often a judgment call, as it’s not always clear from the start. However, by spelling out your expectations and protecting yourself with a home warranty, you can avoid disagreements and save money.