Determining fair wear and tear and value damage
Factors must also be taken into consideration to determine what constitutes fair wear and tear. In addition, there is a way to calculate the cost of item depreciation. Read more to understand what fair wear and tear really means.
Years of professional experience and the No Letting Go ethos have caused me to outline some key points below to be aware of when making a decision in one of the most challenging areas for a letting agent, landlord or inventory management company – that is the determination of what can be deemed as fair wear and tear. This is in contrary to damage and the subsequent costs. Even if area is quite complex and often subjective, common sense, good guidelines, and a relevant experience are key factors in penning a fair and unbiased decision.
Procedures drafted by the APIP and ARLA protocols and also that stated by the Tenancy Deposit scheme are the bases of how No Letting Go assess fair wear and tear depreciation values. The letting agent, inventory company, or landlord should compose decisions considering important criteria like check in document, original signed inventory, property visit clause, tenancy agreement clause, and any other available information made available by the client such as repairs or replacements that would occur during the period of the tenancy.
Factors must also be taken into consideration to determine what constitutes fair wear and tear. These are things like the length of tenancy, type of tenant (single occupancy, family, and others), the severity of the damage, whether smoking or perts have been allowed with the permission of the landlord, the original age, as well as the quality of the items. The landlord is not permitted 'betterment' – meaning they cannot replace old items with new ones at the full cost of the tenant. Allowance must be alloted for depreciation of items.
As indicated in the table below, the landlord’s fixtures, fittings, and decors all have approximate life expectancy, provided that such items are of a medium quality at the start of occupancy. The data gives a broad overview of item life-span, but should only be referred to as a guideline when appraising compensation or replacement values by the tenant to the landlord at the end of the tenancy.
Hallway/landing/stairs (2-3 years)
Dining Room (Approx. 6 years)
Kitchen/bathroom (2-3 years)
Living room (Approx. 4 years)
Bedroom (Approx. 5 years)
Wear and tear of carpets:
Budget Carpet (2 – 3 years)
Medium quality carpet (4 - 8 years)
High quality carpet (Up to 15 years)
Washing Machines (3 – 5 years)
Cookers/Ovens/Hobs (4 – 6 years)
Fridges (5 – 8 years)
There is a way to calculate the cost of item depreciation. First, establish the rate of depreciation per month by dividing the replacement cost of the item by the life expectancy in months. Then, to get the total depreciation, multiply the monthly depreciation rate by the number of months the item has been in service. To give you the depreciated value, subtract this depreciation from the replacement cost.
If no proof of purchase is available, refer to the original inventory to obtain an estimate needed to be made on the age and potential value of the product. Take note of the quality and type of the product too to monitor for guarantees and warranties, as well as the usage. For example, a family with four members is more likely to use a washing machine often than a professional couple and thus, this must necessarily be considered and reflected in the decision. In the same vein, a medium quality carpet with a professional couple living at a property would last for about 5 years, whereas the same carpet would have a life-span of only 3 years with a family occupancy. Seeking the advice of a professional contractor to determine the quality of carpets, laminated flooring, wooden floors, and others, might also be necessary.
Work carried out during the tenancy must also be noted. An example of this is that if a property was classified as dirty at the check in and either the agent or the landlord arranged for professional cleaning to be done after the check in, then the tenant is responsible to ensure that the property is left in a professionally clean condition. Even though the tenant must be provided with the opportunity to clean the property to a professional standard themselves at the end of the stay should they want to do so, the agent or landlord need to secure the receipt for the professional clean at the check in as provided.
If a tenant does not keep a property clean and in good condition throughout the whole period of occupancy, then it just goes without saying that the property will deteriorate much faster. This is not fair wear and tear as contemplated and landlords should not waste time until the end of a tenant's stay to talk about this matter.
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ABOUT THE AUTHOR
The author is associated with an inventory clerk agency providing highly trained inventory clerks and efficient inventory management.