THE IMPORTANCE OF A GOOD INVENTORY

Inventories for private rented properties are imperative. They protect both the landlord and the tenant and this is one of the main activities that shouldn’t be overlooked. A well conducted inventory at check-in can stop you from having to pay out lofty repair bills every time a tenant moves out.

A property inventory is also known as a schedule of condition. Essentially this document is used to detail the condition of a rental property when a new tenancy commences. It also helps identify any damages caused at the end of the tenancy. On top of this, it determines the deductions from a tenants security deposit, which can be difficult to do without. Many landlords believe that an inventory is not necessary. However we’ve found that this couldn’t be further from the truth….

Who conducts the Inventory?

Inventories can be compiled by either the landlord themselves, a letting agent, or an independent inventory clerk. Independent inventory companies should be a member of a professional association to ensure you are dealing with a reputable firm.

Inventory reports are usually compiled on move-in day and both parties are required to sign the document in order to confirm that they are in agreement with its contents. The amount of detail within the report will largely depend upon the value of the property’s contents and may include photographic evidence as well as written documentation.

Landlords should be aware that conducting their own inventory could cause issues should a dispute arise. Protection schemes such as the TDP (Tenancy Deposit Scheme) will always favour inventories conducted by professionals over those carried out by the owner of the property.

How is an Inventory prepared?

The landlord, a letting agent or an independent inventory clerk should prepare the Inventory which should be agreed with and signed by the tenant on move-in day. The Landlord or Agent and tenants should sign the Inventory and initial every page to signify agreement.

What should be included?

A good, detailed property inventory is going to be vital for claiming damages from a deposit. We’ve seen no end of ‘matchbox’ inventories during our years of property management. Basic lists scribbled down on a piece of paper with no detail, dates or signatures just isn’t going to cut it anymore. In most cases, these types of inventories will fall flat when trying to claim via your chosen deposit protection scheme.

As a minimum, your property inventory should detail the condition of every room in the property. This includes walls, floors, ceilings and even doors. Basically anything you can see should be noted. Any key discrepancies should also be accounted for within the document. Even if there is just a small stain on the carpet or a scuff if the paintwork. Make sure this is detailed on the report.

Photographs should also be taken. Take a photo of the room as a whole but also any key areas to note within each room. For example, if there is a scratched kitchen tile then this should too be referenced within the report. An additional photograph should also be taken with something placed next to the scratch to help give an idea of scale. Just fitted a new washing machine? Make sure you take a photo of the unit as a whole. Open the detergent drawer afterwards and take photos of this too for reference.

What happens at the end of the tenancy?

This is the part where your property inventory is key. You should visit and check each room carefully once your tenants confirm that all belongings have been removed from the property. Before exchanging keys, make sure to switch on all lights before checking every nook and cranny in each room. Take notes and photos of any damage caused to the property. However it is really important you allow for fair wear and tear. Length of the tenancy definitely needs to be considered as part of final checking. If carpets are showing signs of traffic then this most likely is not ‘damage’.

General damages should be noted and discussed with your tenant. Also discuss the amounts you wish to deduct from their deposit. Note: Registering your tenants deposit within an approved scheme, means that you are reliant upon the tenants agreeing to the amounts. Therefore you should not make claims for betterment at any stage.

What if the Property or goods are damaged?

If both the Landlord or Agent and the tenant agrees that damage or disrepair needs to be addressed then estimates should be prepared for replacements or repair works. The tenant must be informed of these costs in writing including the amount to be deducted from the original deposit.

The tenancy deposit scheme should also be made aware of what has been agreed with the tenant so they can reimburse the correct amount to the tenant. If the damage or repairs are so bad that they are not covered by the deposit amount, then the landlord or agent should send an invoice to the tenant itemising all of the costs for which they are liable.

If both parties cannot reach agreement as to which items have been damaged, the severity of the damage, the repair or replacement costs then it is in the interest of the landlord and the tenant to record the state and condition with photographs; to get estimates for repair or replacement costs; and the landlord should then inform the tenant in writing.

Can’t agree an amount to deduct?

The deposit scheme will have no choice but to enter the deposit into a dispute status. An independent adjudicator will then request evidence from both parties before making a decision on how to allocate funds. This is where a good, detailed property inventory can make a real difference. The adjudicator will no doubt want to see that you have taken fair and reasonable steps to represent all parties.

No evidence? No property inventory? It is near enough impossible for the independent adjudicator to side with you, unless you have photographic evidence.

We are often asked by landlords if it is worth paying for an inventory to be carried out on their rental property. Our answer is always a resounding YES!

We normally find that when tenants know that there is a detailed report on the condition of a property they naturally tend to take more care in the upkeep or the property.