Fair Wear and Tear vs Damage: What Landlords Can Reasonably Expect

It’s a situation that frustrates many landlords — a tenant moves out, and things aren’t in the same condition they were at the start. But is it damage? Or is it just part of normal living?

Understanding the difference between fair wear and tear and tenant damage is essential to avoid unnecessary disputes, ensure bond refunds are handled fairly, and protect your investment long term.

Let’s break it down clearly.

What is fair wear and tear?
Fair wear and tear is the gradual deterioration of a property due to normal use over time. It reflects the expected decline in condition, even when the tenant has looked after the place.

Common examples include:

• Worn carpet in high-traffic areas
• Faded curtains from sunlight
• Scuff marks on walls from furniture
• Loose door handles or worn hinges
• Peeling paint due to age, not misuse.

These are all considered reasonable outcomes of someone living in the home and cannot be claimed from the tenant’s bond.

The Residential Tenancies Act 1986 (RTA) doesn’t provide a detailed definition, but Tribunal decisions over the years have set a clear expectation that landlords must allow for the natural lifespan of items and not expect the property to be handed back in ‘as new’ condition.

What counts as tenant damage?
Damage goes beyond normal use and landlords are entitled to compensation when this occurs. The key is whether the issue was caused by an accident, carelessness, or intentional behaviour.

Examples of damage include:

• Stains on the carpet from spilled wine or food
• Broken windows or doors
• Holes in walls from mounting a TV without permission
• Pet damage
• Burn marks on benchtops or cigarette smoke damage.

Under section 49B of the Residential Tenancies Act 1986, tenants are responsible for damage if it was caused intentionally and is therefore not covered by the landlord’s insurance. For unintentional damage, such as accidental damage caused by careless behaviour, the tenant’s liability is limited to the lesser of the insurance excess or four weeks’ rent.

The tribunal considers depreciation—so should you
If damage is something the tenant is liable for, the Tribunal takes depreciation into account. Meaning they reduce the replacement cost based on how much useful life the item had left. 

Example:
Let’s say a tenant spills something that irreversibly stains a carpet that’s already 10 years old. Carpets generally have an effective lifespan of around 8 years according to the IRD depreciation schedule. That means the carpet is fully depreciated - its value has already been ‘used up’, so you wouldn’t be able to claim the cost of a brand new carpet from the tenant.

This illustrates one of the most common misconceptions: you cannot replace items like-for-like at the tenant’s expense if they were already past their useful life.

Final inspections need to be fair and well-documented
The key to resolving end-of-tenancy disputes fairly is having clear records:

• A comprehensive entry inspection report with date-stamped photos
• Routine inspection notes during the tenancy
• A detailed final inspection report that fairly compares the start and end condition.

Your property manager should walk you through this process and advise you whether any deductions from the bond are justified, or whether the wear is within a reasonable range.

Realistic expectations make for better outcomes
No property stays perfect forever. Even the best tenants can’t prevent the sun from fading the curtains or the carpet wearing thin where people walk. What landlords can expect is that tenants look after the property, communicate openly, and leave it reasonably clean and tidy.

A good property manager sets clear expectations from the start, manages the tenancy proactively, and ensures the final inspection and bond process are handled fairly and accurately.  If there’s any uncertainty after a tenant vacates, your property manager will assess the situation, provide guidance, and take the necessary steps on your behalf.