What is Fair Wear and Tear on an investment property in Qld ?

What is Fair Wear and Tear on an investment property in Qld ?

WHAT IS FAIR WEAR AND TEAR ON AN INVESTMENT PROPERTY IN QLD?

The idea is that a tenant can live in a property and it needs to be realised that the property will get wear and tear with someone living in it. But what is fair wear and tear ? I’ve realised this is a very grey area and unfortunately for the landlord it’s often favoured towards  the tenants. The older a home gets the more it gets worn out. Marks on walls, marks on carpet. marks on floor boards, blinds or curtains become damaged,  marks on doors, nicks in walls, doors and floor boards. All happen from just from people living in the home.

 

WHAT CAN AFFECT  FAIR WEAR AND TEAR ON AN INVESTMENT PROPERTY?

The quality of the tenant. I’ve seen tenants live in properties we manage for years that look after the investment properties like it’s a display home. These type of tenants are super clean, super respectful and look after the home like it was their own. Then we have had tenants that while pay their rent on time,  & are lovely people to deal with, have a different view on what’s acceptable way to live. The homes are messier. Walls, doors and carpets are worn out sooner. As property managers, even though tenants go through a details tenant selection process it’s very hard to know until a tenant moves in exactly at what level will they help with minimising fair wear and tear. What landlords need to understand is tenants are not required to keep a property at display home standards.

It seems age here is not the issues. We have some every young tenants that look after their rental property incredibly well, all the way through the age group up to people in their 60’s. People have different values  and variations of how they like to keep the home they live in.

The number of tenants. 2 people will create a lot less wear and tear than 5 people living in the same home. While this is generally the rule & makes sense, occasionally it can go the other way where 2 poor tenants can create more wear and tear just because of how they like to live. Again the property manager should try and get an understanding around this by the tenant selection process. Landlords need to appreciate peoples lives now are incredibly busy. So it’s becoming harder to find tenants that will look after a home to a pristine level and legislation doesn’t require them to either.

The age of the tenants. Very young kids almost can’t help running around with their hands on walls. Which is fair enough they are kids. So when young kids are part of the family it’s inevitable the wear and tear on a property will be higher. Especially ages 2 to 4 where they just want to have fun and be silly all the time.

Age of the tenants

How many people. 2 people living in a home will usually wear out a property slower than if 5 people live in the same home. Makes sense. But I’ve also seen the considerable difference between two people that are very house proud tenants and treat the home impeccably compared to 2 tenant who really could take better care of the property. So the type of tenants can really impact how fast a property wears out. Dogs  & cats can make a big difference too. Again I have seen 2 inside cats in a home that’s impeccable compared to one cat that weed on the carpet in every room.

 

HOW CAN FAIR WEAR AND TEAR BE MANAGED

Firstly tenant selection. If you are hyper careful who you place into the property will make a big difference to how long everything will last. But as property manager even when we do very comprehensive check until the very first routine inspection which we do around the 6 week mark we really are unsure how they will keep the property.

Having a detail entry condition report can help but as you will see below, will not always help. If you have photos of how the property is when the tenant moves in, on the routine inspection you can keep a track of how the walls are now looking and keep an eye on general wear and tear with every routine inspection that’s done.

Communicating with the tenant is crucial.  Sometimes tenants just need to be explained what we are expecting, how the home should be looked after. It is a grey area through as legislation does not require any tenant to keep a home pristine and fair wear and tear is a very broad term that you will see more of a little further in this article.

 

WHY IS FAIR WEAR AND TEAR SUCH A GREY AREA?

QCAT in front of a judge

If you end up in QCAT in front of a judge, you are only allowed to show them photos that you’ve had printed out. It’s my experience that it’s incredibly hard to prove in a court what fair wear and tear looks like. I can show a judge a photo of a wall before the tenant moved in and a photo of a wall after they moved out which shows the wear and tear was excessive and the judge will rule that it’s not excessive it’s just fair wear and tear. So if a landlord plans to take a tenant to QCAT over a fair wear and tear concern, they are best to save their money and not bother as the odds are stacked against them.

Here are some real examples ;

DAMAGE TO WOODEN FLOOR

Just prior to the tenants moving in the owners had the wooden floors professionally sanded and re liqueur. We had a detailed entry condition report. The tenants moved out after 6 months. In one of the bedrooms the tenants had put a deep long scratch in the floor when moving furniture. We had the invoice from when the floors had just been re sanded 6 months prior.  We had a $300 quote to get the deep scratches fixed. We had all the evidence we needed to show this was damage and more than “fair” wear and tear. The judge ruled that yes while the damage was done, they would consider this to be fair wear and tear, and added that because we had not already paid the $300 to have the work done, it clearly was not essential. So the tenant got off and the owner now have this large deep scratch in their floor that they had only recently had re sanded.

 

PAINT PATCHES ON WALLS

Tenants had been in the property for 12 months. They were great tenants, really looked after the home. When they vacated they removed all the picture hooks from all the walls that were there prior to them moving in and painted over them with paint that just slightly did not match so almost every wall in the house had this odd square patch on the wall. The only way to resolve this was to have the entire wall repainted. But because they had done this to almost every wall the cost for this was $1,200. We asked they pay $900 to have this fixed up. The really sad thing is if they had removed all the hooks and not painted, the walls would have looked just fine. What’s important to note is one wall in the living room did have 2 other previous paint marks that did not exactly match either. Plus other walls had slight scuff marks at knee height but not very noticeable due to the level they were at.

The judge ruled in favour of the tenants because it was extremely hard to get a photo that clearly showed how the paint did not match. To the judge it was close enough. The judge even acknowledged that if she could stand in the rooms in person she may have ruled differently but they can only go by what is in front of them. We had spent hours preparing we had many before and after photos. We had even drawn around each patch to help the judge see the difference.

Yes there walls did have some scuff marks around knee height, but these new patches that did not exactly match has now truly changed the look of the walls. It’s just the judge could not see enough of a difference in the photos.

 

AGE & CONDITION OF THE HOME

What also gets put into consideration is how long ago has the property had an update. For some odd reason there is an industry standard where it’s expected that that carpet, walls and doors should all be re painted around every 7 years. I do agree that it’s important owners look after their investment properties and there is incredible value ensuring the property is well maintained and looked after. Not sure where the 7 years was invented. But I have some properties that have not been painted for 20 years. Sometimes these properties still look fairly “fresh”, other look incredibly tired. If you are claiming fair wear and tear and you have not looked after the property the judge will just throw the case out. Re carpeting, painting, New fans, new white goods are all good things to updated about every 10 years. But all that sure does add up. Yes it will help increase your rental income and protect the value of your property, but these are big ticket items.

 

IN CONCLUSION

Landlords need to realise part of property investment is fair wear and tear is real. They need to budget to have the property updated at least every 10 years but possibly sooner. If you have a wear and tear issue with a tenant, QCAT will probably favour the tenant so you need to try and resolve your concern with the tenant directly.

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