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Just what is ‘fair wear and tear’?

One of the areas of managing property that can cause a very real difference of opinion, is what is considered to be ‘fair wear and tear’ in a rental property. Just as everyone can have different opinions on what’s clean and what’s not, people also have different opinions on what marks to walls or floors may be considered ‘fair wear and tear’ or are they claimable against the tenant’s Bond.

Legislation in Victoria indicates that a rental property must be returned in a ‘reasonably clean’ condition, which is a fairly loose statement that doesn’t provide much assistance when negotiating the return of a property in what a landlord or property manager would consider an acceptable and clean condition. The statement made in Victorian legislation is very much open to interpretation and in my opinion, not fair and reasonable from a landlord or property manager’s perspective. Any rental property should be returned in the same condition it was when the tenant moved in – ‘fair wear and tear’ excepted. The standard of ‘clean’ should also be considered in the same way – any rental property should be returned in the same ‘clean’ condition it was in when the tenants moved in. But this can sometimes be extremely difficult to prove as people have different standards of ‘clean’. The legislation is consequently of no assistance at all.

Legislation also states  – ‘The landlord must accept fair wear and tear.’ Unfortunately, that statement is not of much assistance to any landlord or property manager when trying to negotiation an acceptable outcome for both parties, but it’s the only reference we can work with. If a claim is made to VCAT in relation to marks on walls, floors or anywhere else, the VCAT Member will make the decision as to what will be allowed and what will not. For example, if a property manager is making a claim for damage to carpet and the tenant believes it is fair wear and tear, the VCAT Member may ask what the age of the carpet is and may depreciate the cost accordingly.   Whether or not it’s damage or fair wear and tear doesn’t appear to matter, it’s the age of the carpet that seems to be considered. The landlord or property manager could ask why, but as the VCAT decision is final and there is no other recourse, that is the end of the claim.

It would be the same with marks on walls. Over time, all walls will have some level of marks, e.g. if a property has been rented for ten years or more, there will certainly be some minor marks to walls.  With furniture being moved in and out with tenancy changes plus a normal living environment, there are bound to be some marks. But could deep/long/black marks in a bedroom or living room, be considered fair wear and tear. A VCAT Member may agree that it is, but almost certainly they will look at the age of the property and depreciate the claim accordingly. Whether or not the property had that level of marks when the tenants moved in and a landlord or agent had photos to prove the walls were fine, the Member may still consider it to be ‘fair wear and tear’ because of the age of the property.

It’s a very confusing subject and does cause a lot of angst between tenant, landlord and/or agent. We all see these things differently, depending on which side we sit on.  But surely, ‘fair wear and tear’ should be considered for the current tenancy only and depreciation shouldn’t become a factor of consideration?

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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

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