THE GREAT DEBATE – IS IT FAIR WEAR & TEAR OR DAMAGE?
What is the difference between ‘wear and tear’ and ‘damage’?
It’s a conundrum faced by many landlords, agents and tenants, but why is it so confusing? Well, it is because there’s a very fine line been the different types of damage. Let us break it down for you…
What is wear and tear?
Normal wear and tear is damage that naturally occurs over time in an investment property due to use and ageing. It typically results from the tenant’s day-to-day use of the property, like walking on the floors and using the benchtops. It can also simply be the result of the property getting older and being exposed to natural forces, such as gutters rusting from rain or timber window frames fading in the sun.
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 is expected and considered normal depreciation, it is not covered by landlord insurance.
And, what is damage?
Damage is caused by tenants and isn’t caused by ageing. It is typically the result of negligence, carelessness or abuse. 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).
Cover for these three types of damage varies between insurers, with most excluding at least one type. EBM RentCover (source of article) provides cover for all three types of damage.
In a nutshell
A basic way to determine if something is wear and tear or damage is to decide if it is something likely to happen gradually over time, based on the normal daily use of a residential home (wear and tear), or something that has been damaged due to carelessness or abuse (tenant damage).
Here are some examples of what is normal wear and tear (and the landlord’s responsibility) and what is damage (and the tenant’s responsibility):