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 is worn out. Marks on walls, marks on the carpet, marks on floorboards, blinds, or curtains become damaged doors, and lino flooring &  floorboards. All happen 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 types of tenants are super clean, super respectful, and look after the home like it was their own. Then we have had tenants that while paying their rent on time,  & are lovely people to deal with, have a different view on what’s an 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 issue. We even have young tenants that look after their rental property incredibly well, all the way through the age group up to people in their 60s. 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 of this through the tenant selection process. Landlords need to appreciate people’s lives now are incredibly busy. So it’s becoming harder to find tenants that will look after a home to a pristine level.

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 will be higher. Especially ages 2 to 4 where they just want to have fun and be silly all the time.

HOW MANY PEOPLE

Two people living in a home will usually wear out a property slower than if five people live in the same house; it 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 tenants who really could take better care of the property. The type of tenants can impact how fast a property wears out. Dogs & cats can make a big difference too. Again I have seen two inside cats in a home that’s impeccable compared to one cat that wee on the carpet in every room. 

HOW TO MANAGE FAIR WEAR AND TEAR 

Firstly tenant selection. If you are hyper-careful, who you place into the property will significantly affect how long everything will last. But as property managers, even when we do a comprehensive check until the first routine inspection around the 6-week mark, we are still determining how they will keep the property.

A detailed entry condition report can help, but as you will see below, it will only sometimes help if you have photos of the property when the tenant moves in, on the routine inspection, you can keep track of how the walls are now looking and keep an eye on general wear and tear with every regular review.

Communicating with the tenant is crucial. Sometimes tenants need an explanation of what we are expecting. It is a grey area as legislation does not require any tenant to keep a home pristine, and fair wear and tear is an inclusive term that you will see more of a little further in this article. 

WHY IS FAIR WEAR AND TEAR SUCH A GREY AREA?

If you end up in QCAT in front of a judicator you can only show them the printed photos. In my experience, it’s tough to prove what fair wear and tear looks like in a court. I can offer a judge a photo of a wall before the tenant moved in and a photo of the same wall after they moved out, which shows the wear and tear were excessive, and the judge will rule that it’s not unreasonable. It’s just fair wear and tear. So if a landlord plans to take a tenant to QCAT over a proper 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 THE WOODEN FLOOR – A CASE STUDY

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

Naturally, prior to the huge cost of attending Qcat, first we had a reconciliation call with the RTA, where they call us and the tenants and try to come to an agreement. The tenant was simply firm that while yes they did it, they had no intention of paying for it.

What’s interesting is the cost to attend Qcat is more than the $300 bill, but simply out of principle, the owners wanted to take action and make the tenant pay.

The owners ended up with the costs to attend Qcat & the $300 repair bill. 

PAINT PATCHES ON WALLS – A CASE STUDY

The tenants had been in the property for 12 months. They were great tenants and looked after the home. Every room of the house had at least 2 picture hooks that had been there for years. When the tenants vacated, they paid a handyman to remove all the picture hooks from all the walls, along with painting a square about a foot in diameter. The thing is the paint was slightly different. So now each room had at least 2-foot wide squares in the middle of the walls with slightly different colour paint.

The only way to resolve this was to have each entire wall repainted. But because they had done this to almost every wall, the cost for this was $2,000. We asked they pay $900 to have this fixed up. What’s important to note is that one wall in the living room did have two other previous paint marks that did not precisely match either. Plus, other walls had slight scuff marks at knee height, but they were not very noticeable due to the level they were at.

RULE OF JUDGE

The judge ruled in favour of the tenants because it was tough to get a photo that clearly showed how the paint did not match. To the judge, it was close enough. The judge 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 also spent hours preparing, with many before and after photos. We even drew around each patch to help the judge see the difference.

Yes, their walls did have some scuff marks around knee height, but these new patches that did not precisely match have now truly changed the look of the walls. The judge could not see enough of a difference in the photos.

WINNING AND NOT GETTING PAID – A CASE STUDY

We had a great tenant, during every routine inspection, the home looked like a display home. But her relationship had ended.

During the tenancy, the tenant had been given permission to put hooks on a fair few walls under the condition that when they vacate the walls are patched and painted.

Now with relationship issues, this tenant started to get late with the rent and we spent a lot of time getting them to pay on time, until it got to the point we had to send a Notice to Leave.

Prior we spoke to the tenant in detail about the vacate process, We have correspondence from her about the tradesperson that would be patching the walls, and fully repainting the walls.

When we arrived the day after the keys were handed back, the walls had not been rectified. The hooks had been removed, but a fairly large hole was left. The tenant had lied to us.

We attended Qcat. The tenant did not attend. We won the $1,700 order. The tenant had 30 days to pay. She didn’t. We then had to lodge the non-payment with the magistrate. Which we did.

Then nothing. At this point for the tenant to be served, we needed to know her new address which she had failed to supply us. Without that, we had no way of finding her address to continue the process. So we kept on looking into her to try and track her down & in doing so discovered that she had been taken to court for not paying private school fees and was now declared bankrupt. 

AGE & CONDITION OF THE HOME

What also gets considered is how long ago the property had an update. For some odd reason, there is an industry-standard where it’s expected that carpets, walls, and doors should be repainted every seven years. Its essential owners look after their investment properties, and there is incredible value in ensuring the property is well maintained and looked after. I am still determining where the seven years were invented. But I have some properties not been painted for 20 years. Sometimes these properties still look pretty “fresh”; others look incredibly tired. The judge will throw the case out if you claim fair wear and tear and have not looked after the property. Re-carpeting, painting, new fans, and new white goods are all good things to update about every ten 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 oversized ticket items.

IN CONCLUSION

Landlords need to realise part of property investment is fair wear and tear is natural. They need to budget to have the property updated at least every ten years but sometimes sooner. If you have just given your investment property an update with new carpet, flooring and paint, or if your property is brand new after the first 12 months it’s not going to look new anymore. There will be nicks on the floor, scuff marks on the walls & the carpet will look a little tired. 

If you have a wear and tear issue with a tenant, QCAT will favour the tenant. So you need to try and resolve your concerns directly with the tenant or realise it’s all part of the wonderful world of investing in property.