How To Calculate Fair Cleaning And Repair Costs - Betterment
Landlord and tenant disputes over damage and wear & tear to rental properties are often the source of heated disagreements. Rows erupt over the fairness of not returning deposits and who is responsible for paying for the costs of repairs.
Resolving these disagreements comes down to applying the rules of betterment – calculating who should pay – and how much.
The rules of betterment clearly explain a landlord should not be at a financial advantage or disadvantage at the end of a tenancy allowing for fair wear and tear of a rented home. Fair wear and tear depending on the tenancy.
For instance, a home rented by a pensioner is likely to suffer far less wear and tear than one rented by a family with young children or pets.
The next point to consider is the best way of putting right any damage that is more than fair wear and tear.
Low-cost cleaning or repair
This could be cleaning a stain on a rug rather than replacing the item. However, if the landlord replaces the rug and deducts the cost from the deposit, this would be a betterment rather than a repair. In this case, the landlord should split the cost – charging the tenant a fair cost for the repair but paying for the rest of the replacement charge. The way to do this is to ask for quotes to remove the stain from two or three cleaning firms and charge the tenant the cheapest. Copies of the quotes should be supplied to the tenant before replacing the rug. The cost should then be deducted from any deposit.
Fair cost of replacement
Sometimes, cleaning or a repair is not worthwhile for the landlord, but charging the tenant the replacement cost is unfair. Take a fitted carpet that has seen the best years of wear with a stain that needs cleaning. Apportioning the cost is the fairest way to charge the tenant. This formula considers the asset's value and lifespan and splits the purchase cost over the lifespan. The figure input as the asset's expected life should reflect the degree of wear and tear relating to the tenancy. Adjust the figure up for low wear and tear or down for high traffic. Here is a worked example showing how the formula works:
|Replacement cost of carpet
|Age of carpet
|The expected life of the asset
|Expected time before renewal of carpet (C – B)
|Annual depreciation (A / C)
|Apportioned cost to tenant (D x E)
The principle is the tenant should only pay a fair cost of cleaning or replacing an asset that is proportionate to the time they spend in the home. Back up the calculation with a copy of the original purchase invoice and an explanation of how the expected life of the asset was calculated.
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