When Damage Occurs at a Rental Property
Accidental damage can occur, at any time, to a property. Intentional or malicious damage (graffiti or smashed walls/windows) is certainly another issue during a tenancy and would be handled differently than accidental damage.
Unintentional or accidental damage is the most common and is no way a reflection on how bad or good a tenant is. The following examples are a very common occurrence and things we see brought forward or arise in tenancy disputes.
A new energetic puppy can chew air conditioning hoses, young kids turning on switches to irons when they were face down on the carpet, kids bouncing on a bed and elbowing the wall, moving furniture and scraping a large dent, incense stick falling onto carpet, moving the fridge and tearing the lino, stains or cuts to kitchen benches- these are all common issues and certainly not intentional, but while they are accidental, they are still classed as tenant damage.
The QLD legislation clearly states that a property must be maintained (and returned) in the same condition at the start of the tenancy, with the exception of wear and tear.
So what is wear and tear?
RTA states wear and tear would be normal things that would happen to a property during normal use of a property and changes that occur with ageing. Things like fading of curtains or carpet from the sun, paint fading or peeling, plaster cracks in walls from movement and putty falling from old window frames. Anything not caused from ageing or normal use would be considered accidental damage.
What happens when the damage is found to be accidental?
RTA and QCAT have clear precedents on what can be claimed from tenants regarding any damages. The first question is: Can the damage be repaired or does it have to be replaced? Things like, a dent in the wall or cracked window can be repaired. Repairing the item can be done by the tenants as it is generally their cost, however the repair must be done to a satisfactory and workmanlike standard. Patching a hole in the wall that previously did not have any patches would mean that the standard should be that you cannot see the patch. If the patch and paint stand out, this is not to a workman-like manner and will need to be redone. Quite often this will require repainting the entire wall.
It’s important to remember that if you are vacating, this damage should be repaired prior to your vacate as there is no obligation to allow tenants to return to the property and attend to it after the keys are returned. If an items damage can’t be repaired then it may need to be replaced. If the damage occurs during a tenancy, the damage should be rectified in a timely manner i.e 30 days unless otherwise agreed in writing.
What happens when an item needs to be replaced?
QCAT have precedents regarding replacement items based on the lifespan or depreciation of the item. Tenants cannot be charged ‘New for Old’ so these guidelines form the basis on what a tenant is liable for.
Example:
Carpet has a depreciation/lifespan of 10 years (according to BMT and depreciation standards) If carpet is 4 years old and the tenant damages it, and the replacement value is $1,000, the carpet has $100 per year depreciation on your tax over the last 4 years and had 6 years left. The compensation claim would be $600 = 60%
What is tenant compensation/fine?
Compensation is the amount of money we would charge a tenant for damaging an item that needs to be replaced. Compensation is also commonly called a ‘fine’ but technically owners and agents cannot ‘fine’ a tenant, this would be compensation. The RTA is the only body that can issue a fine. Whilst it’s called a fine colloquially, it’s technically compensation.
The owner of the property can choose what they would like to do with the compensation, depending on the severity of the damage. They may want to hold the compensation amount and replace the item at a later date, or they may wish to contribute to the non-claimable portion of the cost and replace the item now. This can all be negotiated. Please note that the owner is not under obligation to replace the item unless it is part of the emergency repair list eg, stovetop, oven, etc. To ensure standards are met, agents require both a quote for replacement and an age of the item to ascertain the compensation.
What if the item is costly to replace?
In some cases, the owner of the property may wish to make an insurance claim on the item or damage. In this case, the tenant may be asked to contribute to the cost of the excess of the insurance which may be considerably smaller than the cost to repair/replace the damage. Please remember that the owners do not have to do this and are under no obligation to make a claim. Any money collected from the tenant should be disclosed to the insurer.
What if the tenant refuses to pay?
When a tenant refuses to pay compensation or any funds towards repairs, we would then proceed to the RTA. Depending on whether the tenant is vacating or if this is during a tenancy, the RTA will mediate to find a resolution between both parties. If this fails, then both the agents and tenant would proceed to court.
In QLD, this is the Queensland Civil and Administrative Tribunal – QCAT. A claim is made by either party and an adjudicator or magistrate will consider both sides including ages of the items, length of tenancy etc and make a formal decision. This process often costs between $300 – $500. The agent represents the owner of the property. Therefore, the tenant and the agent are the only ones who need to appear. The judge may also make an order if the tenants fail to appear. Once an order is made for compensation, the order is then given to a debt collector to enforce the payments. If an order is made against a tenant, this is generally grounds to name the tenant on a blacklisting database such as TICA.
Tenant damage can be very sensitive as tenants often feel like they are being attacked and charged for things that they didn’t intentionally do. We as agents ultimately work on behalf of owners. It’s our obligation to ensure the property is kept and returned to the same standard. Often conflicts, such as these, can be minimised if tenants are upfront about any damages and work together with the agents to rectify the issues before it gets to the RTA and QCAT.