What does ‘fair wear and tear’ mean in the context of a lease agreement?

November 1st, 2017
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By Madeleine Truter

The phrase ‘fair wear and tear excepted’ is commonly used in lease agreements. It is, therefore, essential to understand what the phrase really means. In order to understand the meaning of ‘fair wear and tear’, it is helpful to distinguish ‘fair wear and tear’ from ‘damage to the leased premises’. ‘Fair wear and tear’ refers to the deterioration in the condition of the leased premises, caused by normal, everyday usage during the period of the lease. This accepted norm will differ depending on the type of business the tenant conducts at the leased premises. For example, an office employing a small staff compliment will have less impact on the flooring, than a retail business with hundreds of customers walking through the leased premises. Weathering caused by natural elements would also be considered as ‘fair wear and tear’. Any leased premises, which is not newly built or recently refurbished, will have some level of deterioration of condition when leased, thus requiring both the landlord and the tenant to agree at the time of concluding the lease, on the current state of the leased premises, thus providing a reference point from which future ‘fair wear and tear’ may be assessed. In contrast to ‘fair wear and tear’, ‘damage to leased premises’ is any deterioration outside the accepted norm, and can also be defined as negligent or accidental destruction and/or damage to the leased premises. Possible examples are a carpet being ripped while desks are moved, stains which cannot be removed despite professional cleaning, nails hammered into walls in order to hang pictures, or painting the walls a different colour without the landlord’s consent. All of these examples would require the tenant to make good the situation, or forfeit a portion of the deposit, in order to return the leased premises to its original state. At the end of the lease period, the tenant must hand over the leased premises in the same state in which it was received, with the exception of ‘fair wear and tear’.

Court tests for ‘fair wear and tear’

‘Fair wear and tear’ as taken from the old case of Radloff v Kaplan 1914 EDL 357 refers to the ‘dilapidation or depreciation which comes by reason of lapse of time, action of weather etc, and normal [use]’. The aforementioned phrase is still used as the authoritative definition for ‘fair wear and tear’.

The phrases ‘fair wear and tear’ and ‘reasonable wear and tear’ are interchangeable.

The phrase ‘fair wear and tear’ does not mean that a tenant who undertakes to maintain the leased premises in good repair is obliged to put the leased premises into such good condition when the lease begins – this is the duty of the landlord at the commencement of the lease, as per Sarkin v Koren 1949 (3) SA 545 (C). The Sarkin case might be an old case, but is still used as one of the foremost authorities, in relation to lease agreements.

The tenant is also not under any obligation to repair structural defects, or to put the leased premises in a better overall condition than it was on the date when the tenant took occupation. The tenant must only make such repairs as are ordinarily required. In the Sarkin case, the court stated that the tenant was not obliged to attend to mending a thatch roof that had deteriorated. The court stated that in order to establish a breach by a tenant of his duty to repair any part of the leased premises in terms of a lease agreement, the condition of the leased premises at the commencement of the lease is of primary importance. The court further stated that if the landlord failed to put the leased premises in a proper state of repair before handover, there is authority for the proposition that there was no duty on the tenant to put the leased premises in a better condition, than that in which he found them.

The tenant is also not under an obligation to rebuild a structure that has been totally destroyed (see Commercial Union Assurance Co of South Africa Ltd v Golden Era Printers and Stationers (Bophuthatswana) (Pty) Ltd 1998 (2) SA 718 (B)). The courts have noted, however, that a tenant may be under an obligation to repair parts of the leased premises, which entails replacing worn out parts with new ones. In the Radloff case, the court clarified the phrase ‘fair wear and tear’ by stating that ‘if the person who is under the duty to repair lets time run on unduly without doing anything towards the upkeep and keeping in order of the place, he cannot rely on the exception of wear and tear.’

In the Sarkin case, the court a quo looked at what might need to be repaired by a tenant that would not fall under the exception of ‘fair wear and tear’ (Sarkin v Koen 1948 (4) SA 438 (C)). Fixing of lights and fixing broken tiles on roofs were among examples mentioned by the court. The court noted that the items need not be replaced, but just repaired. Per the court’s wording: ‘Time must be taken into account; an old article is not to be made new; but so far as repair can be made good or protect against the ravages of time and the elements it must be taken.’

In the case of Cash Wholesalers (Pty) Ltd v Marcuse 1961 (2) SA 347 (SR), the court decided that: ‘Where it has been established that a floor has worn thin over the years and is no longer capable of taking the load required for use by the lessee for the purposes of the lease and is therefore no longer reasonably fit for the purposes of the business of the lessee, the lessee is entitled to look to the lessor to have the matter remedied, even if this involves a new and better floor.’ However, the court noted that: ‘Replacing a floor is not a structural alteration, and it is not necessarily outside the tenant’s obligations under a repair clause, even if it involves new and modern material’ – it will be necessary to determine in each case where the responsibility for repair lies, namely, either with the tenant or the landlord, depending on the court’s interpretation of what falls into the exception of ‘fair wear and tear’. The court stated that the tenant must, having regard to the age, the condition of the building at the time of letting, and the length of the lease, keep the interior reasonably fit for occupation by a wholesaler, ordinary wear and tear excepted.

In the case of Arendse v Badroodien 1971 (2) SA 16 (C), the court also had regard to the state of wooden floors in the leased premises subject to a certain lease agreement. The court stated that the tenants had stayed in the house for six years before the rot in the floors became evident, and that it was just as likely as not that the rot had set in as a result of ‘fair wear and tear’. Accordingly, the tenant was not liable for the repair of the floor.

In the case of Pete’s Warehousing and Sales CC v Bowsink Investments CC 2000 (3) SA 833 (E), the condition of leased premises, leased for use as a storage warehouse, was under question by the court. The court cited the case of Sarkin in noting that the obligation of the tenant to maintain the leased premises, must be interpreted in the light of the condition of the leased premises as at the date when the lease became operative. The court stated that if the tenant registered a complaint regarding the condition of the leased premises at the commencement of the lease and the landlord did not attend thereto, the landlord’s duty of maintenance would remain operative. The landlord is also obliged to repair any damage to the leased premises caused by ‘fair wear and tear’.

In the case of Brightside Enterprises (Pvt) Ltd v Zimnat Insurance Co Ltd 2003 (1) SA 318 (ZH), the court agreed with the decision of the court in an earlier case of Green v Heyman 1963 (3) SA 390 (T), in which the court stated that ‘the lessee shall, on assuming occupation of the premises, satisfy himself that the premises are in a good state of repair. Thereafter the lessee shall be responsible for the maintenance of the interior of the premises in good order and condition, and shall return the premises to the lessor on the expiration of the lease in the same good order and condition, fair wear and tear excepted. This … imports an obligation on the lessee to repair the plate-glass windows should they become damaged.’

Conclusion

The bottom line is that, unfortunately, there is no fixed test for what may fall under the exception of ‘fair wear and tear’ in lease agreements – it depends on the court’s interpretation of the facts and circumstances of each case. However, there are some indicators as per the case law outlined above.

From a practical perspective, in order to avoid possible disputes between the landlord and the tenant, it is essential that an in-going inspection of the leased premises is performed, so as to ensure that both parties are fully aware of the condition of the leased premises. It is also advisable to take photographs of any area, which may later come into dispute, as these pictures may be the clinching proof in settling a dispute at a later date. The landlord and tenant should agree on the primary use for which the leased premises is required, as well as the most likely wear and tear, which may be anticipated, before concluding the lease. The lease should stipulate which party will be responsible for which specific maintenance or repair items. Similarly, an out-going inspection will provide both the landlord and the tenant with complete assurance that the condition of the leased premises is of an acceptable standard.

Madeleine Truter BLC LLB BA (Hon) LLM (UP) is a legal adviser for Setso Property Fund in Johannesburg.

This article was first published in De Rebus in 2017 (Nov) DR 24.

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