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Best practice guide Determining refurbishment and fair wear and tear in retirement villages

What is fair wear and tear?

Fair wear and tear is defined by the Code of Practice as damage or deterioration that occurs through normal use or is the normal change that takes place with the ageing of the property. If the only damage or deterioration is through normal everyday use, the operator should not charge residents for the cost of refurbishing the unit if the occupation right agreement was signed after 25 September 2006.

Examples of fair wear and tear include:

  • cracked window panes due to old warped frames
  • paint scratched or chipped
  • paint fading and discolouring over time
  • plaster or brickwork cracks as building settles
  • cracked floor or wall tiles resulting from structural movement
  • wall linings punctured by fixing devices for pictures, shelving, curtains and door stops etc
  • worn carpets from day-to-day use
  • kitchen counters marked or scratched by kitchen implements
  • walls accidentally marked by random contact or sunlight.

Application of the fair wear and tear part of the refurbishment clause requires operators and residents to assess whether any damage or deterioration to the residential unit has been caused by normal everyday use. If it is, the operator cannot charge the resident for this if the occupation right agreement was signed after 25 September 2006.

The meaning of normal everyday use should be determined in connection with the age, health and circumstances of the resident when they signed their occupation right agreement, and the type of accommodation they are moving out of (eg, independent living or serviced apartment).

If you use a mobility aid such as a cane or walker, you may wish to ask your lawyer about the implications of use before you sign your occupation right agreement. If you are already a resident and use a mobility aid, you can either ask your operator for more information or you can seek independent legal advice.

Fair wear and tear excludes intentional or careless damage caused by the exiting resident or their guests at any time during the resident's occupancy.

Examples of damage that may not be covered by fair wear and tear include:

  • door or window glass or frame cracked from being carelessly slammed
  • paint discolouring through regular candle smoke
  • linings or trim damaged by hammer, screwdriver or rough use
  • minor damage that worsened over time because it was not reported for repair.