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Property Inventory – How Important are they?

By | 2019-03-12T14:36:49+00:00 February 11th, 2019|Landlord Tips|0 Comments

Landlords in Nottingham continue to face issues surrounding the condition of their rental properties at the end of the tenancy. In fact, during our property appraisals we see as many as 30% of landlords still questioning the benefits of a good property inventory. This article intends to de-bunk the myths surrounding property inventories. On top of this, our key steps below will reduce, if not stop you from having to pay out lofty repair bills every time a tenant moves out.

What is a property Inventory?

A property inventory is also known as a schedule of condition. 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…

What should be included?Property Inventories

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 in Nottingham (which you’ve probably experienced yourself). 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.

Common classifications

Always classify everything within the property based on it’s condition. Common classifications regularly used are listed below:

Brand New – In very good condition. New and unused.
Good – Not new. However no notable damage or discrepancies.
Fair – Showing some signs of wear and tear. However still undamaged.
Poor – Showing signs of damage. Likely to need replacing or repairing in future.

Key attributes should also be noted on the inventory too. This can include: meter readings, security alarm codes, stopcock locations and smoke detectors. You can even reference the number of keys provided to your tenants at the outset. There really is no limit to the level of detail you can include (as long as everything is reflected / logged correctly).

How do I use the inventory?

The next steps are key to ensuring that your tenancy is recognised in the event of a dispute. Firstly, always allow your tenants to carefully check over the inventory upon moving into the rental property. You can do this as part of the check in process. Alternatively, you can give your tenants time to carefully review it themselves – in their own time.

Hint: Make sure your tenants sign a disclaimer to confirm that they will return the property inventory within 7 days or less. Feel free to write a clause that states to the tenant ‘if you do not return this to me within the required time period, then I will assume you accept the property inventory for being accurate’. This saves you having to chase up the tenant.

You may find that your tenants will query discrepancies in the document. Ideally this won’t be the case (as things should be agreed upfront). However if this does happen, then you will need to amend the property inventory notes accordingly. You both need to agree that the document is correct.

Finally, all parties should sign and date the document and a property inventory copy should be held by all involved.

You can find further information on the ARLA website.

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.End of tenancy

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. Not forgetting the insurance side of things.

However this is just one of the many factors to consider when renting out your property. Click here to view additional factors to consider when renting out a property.

Many landlords prefer to instruct the services of a reputable letting agency instead – if you are reading this then congratulations as you have just found one!

Want to find out more about our Award Winning lettings services? Call us today on 0115 981 9651 for a friendly informative chat.

www.slaterandbrandley.co.uk/

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