INVENTORIES, LANDLORDS & TENANCY DEPOSITS - ADVICE FROM LETTINGFOCUS.COM
LettingFocus.com expert David Lawrenson explains why landlords in the buy to let business should alway do a thorough property inventory.
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 the UK taken as part of assured shorthold tenancies have to be registered with a government approved tenancy deposit scheme.
This change has undoubtedly led to more tenants successfully challenging landlords who have withheld part or all of a deposit.
And with good reason. 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 HAS THAT GOT TO DO WITH INVENTORIES?
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.
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 furniture, describe 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
Obviously, a proper inventory document will be quite a long document and it will take some time to complete so it is 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 - one for the tenant and one for you.
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.
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.
Inventories should include photos of all items and all rooms as well as the garden.
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.
KEEP IT UP TO DATE
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” and added on to the inventory as an amendment.
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.
We always recommend landlords hire an independent inventory clerk to make out the inventory. It saves you time, is not terribly expensive and puts an independent person between you and the tenant.
ABOUT DAVID LAWRENSON AND LETTINGFOCUS
I’m David Lawrenson from property letting experts LettingFocus.com.
We work in a consultancy role with organisations helping them with their products for the private rented sector but we also offer unbiased advice for landlords too.
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Copyright 2011 David Lawrenson. This article must not be copied or re-used without the author and copyright owner’s prior permission.