INVENTORY, LANDLORDS & TENANCY DEPOSITS - ADVICE FROM LETTINGFOCUS.COM
LettingFocus.com expert David Lawrenson explains why landlords in the buy to let business should do thorough property inventories. Ask us for advice.
Property investment expert David Lawrenson of www.LettingFocus.com says, "You should ensure your property inventory is as detailed as possible as there can be no doubt that disputes about the state and condition that investment properties are left in by tenants is the main source of landlord and tenant disputes."
Tenancy Deposit Schemes
All tenants deposits in England and Wales taken as part of assured shorthold tenancies starting on or after April 6th 2007 now have to be registered with a government approved tenancy deposit scheme.
This change has undoubtedly led to more tenants challenging landlords who have withheld part or all of a deposit.
And with good reason. Because the administrators of the schemes have dispute resolution tribunal procedures and since they can look only at the facts, landlords who are in dispute may well lose out, if they cannot prove that they were wholly in the right.
What’s that got to do with Property Inventories?
Well, if you have a tight inventory for your let property, backed up by good communication in the run up to the end of the tenancy, you will severely inhibit the tenants’ ability to dispute valid reasons for deducting money from deposits.
However, too many landlords don’t do a tight enough inventory.
So let’s have a look at what should be in a good landlords' inventory.
What is in a Good Inventory?
Each item that is in the property should be noted on the inventory in room order and in detail. And I mean each item, right down to things like loo roll and towel holders as well as keys and manuals for electrical goods and boilers.
For things like washing machines, describe the make and model (and ideally serial number too.) That way, you will also have a handy record if you later need to call out a service mechanic to repair it.
For things like furniture describe not only the make and model of each item as fully as possible. If you don’t, you risk your lovely large six-seater dining table being replaced with something smaller and infinitely less smart.
Any items that are dirty, scratched or in otherwise poor condition should be noted as such on the property inventory.
Good Inventories Take Time to Complete
Obviously, a proper inventory document will be quite a long document and it will take some time to complete so it i’s best to pre-prepare the inventory document well before the tenants move in.
If you try to do it from scratch on move-in day, you could well end up spending quite a long time – and end up with a possibly garbled handwritten document that may be hard to read.
So have one pre-prepared and printed out - in duplicate - and note every item and its condition too.
You’ll still need to allow time to go around the property with the tenant on the day, because they must have the opportunity to check that everything is recorded fairly and be given the option to comment on the state and condition of things too.
Allow Tenants to Comment
Allow space on your pre-printed form for additional comments to be added on move-in day. Where additional comments have been added, both you and your tenant should initial to confirm agreement.
It’s always worth noting if any items are in new condition and / or have been recently cleaned. So if you have had the carpets “professionally steam cleaned using the hot water extraction method” then say so on the inventory.
Get a Signature
In addition, you should include at the bottom of the inventory something like “The tenants have inspected the state and condition of each item on this form and accept and agree that each item is in a clean and undamaged order at the time of taking on this tenancy unless noted otherwise on this form.“
If the tenant signs this, they cannot possibly argue that any item not noted otherwise was not in excellent condition.
If things are slightly damaged, then state explicitly what the damage is. So, if the table has one leg that is slightly loose, then say so. Otherwise, if you just say, “one table - legs damaged” you risk having it back in pieces at the end of the tenancy agreement.
Inventory Updates
If you fix any item that has been noted as being at fault on the inventory, then you must get your tenants to sign that this has been done. This could be done as an “update note” on the inventory.
In order to avoid the risk that you become liable for damage caused by the tenants’ removers, you should always check the property inventory before the tenant moves in any belongings. (Similarly, on check out, the inventory should be done only after they have moved all their things out.)
You must accept “fair wear and tear” but the reasonable cost of any damages that were not noted at the outset in the property inventory when it was signed can be deducted from the deposit.
About David Lawrenson and Lettingfocus.com
If you need more advice on inventories or tenancy deposit schemes please contact me. I’m David Lawrenson from property investment mentors LettingFocus.com.
I’m David Lawrenson from property experts LettingFocus.com.
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Copyright 2008 David Lawrenson. This article must not be copied or re-used without the author and copyright owner’s prior permission.
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