Four steps to protect your property and your pocket
The property inventory is one of a landlord’s most important documents. A professional property inventory will help protect you against damage to or loss of your property, and also prevent disputes over the tenancy deposit at the end of the tenancy. In my last article, I described the costly mistake a DIY landlord made with her property inventory. This article will help you avoid making the same mistake.
Remember the five Ps
The five Ps – Proper Planning Prevents Poor Performance. A good mantra to follow as a landlord, especially when considering the property inventory. The steps you take at the beginning of a tenancy will resolve disputes at the end.
Without a property inventory, there is no evidence to support your claim against the tenancy deposit. You won’t receive any money to help pay for damage or missing items.
If your property inventory is inadequate, and the tenants decide to dispute your claims in court, you will lose.
The property inventory should be part of your planning. It should be like indelible ink – there for all to see, always. It helps determine:
- What damage has been caused, if any
- What items must be replaced, if any are missing
- What cleaning costs can be reclaimed
By comparing the check-in inventory with the check-out inventory, you can determine all the above and place an accurate value on each expense. Without an accurate property inventory, proving your case in court will be almost impossible. You are very likely to lose a dispute. With an accurate property inventory, a dispute probably won’t get to court, and the tenant will be more likely to keep all their claim from the deposit.
What is most likely to be disputed?
Thanks to the Tenancy Deposit Scheme, it is now possible to say what a tenant is most likely to dispute at the end of a tenancy. In 2017, it was found that almost six in 10 tenants disputed cleaning costs and half disputed costs associated with fixtures and fittings. One third contested the costs that landlords wanted to deduct from the tenancy deposit to cover internal decoration.
Here is a simple method to help you avoid such disputes.
1. Compile a professional property inventory
Your property inventory is like a report, detailing all the items in the property and recording the condition they are in. You should include everything, from floor to ceiling:
- The walls, ceiling and floor
- The paintwork
- Carpets and curtains
- Items of furniture
- All white goods and electrical and gas appliances
- All fittings, such as wardrobes and cupboards
- Windows and doors
- Lightbulbs, lampshades, smoke alarms, etc.
Don’t leave anything off the property inventory. Is there a letterbox on the front door? Include it, and the condition it is in.
The property inventory should note the condition of each item (e.g. excellent, good, fair, poor) and be accompanied with embedded photographs and videos.
2. Conduct a professional check-in
When you check in the tenants at the start of their tenancy, make sure that you walk them through the property inventory step-by-step, item-by-item. Do this before they move any of their belongings into their new home. The property inventory must be agreed and signed. Only then should you allow the tenants to move in. This means that any damage caused during the moving in process is captured.
I cannot stress this point enough – the tenant must sign the property inventory. If they don’t you will probably lose if a claim is disputed at the end of the tenancy.
3. Conduct periodic property inspections
If you are cooking a dish for dinner, you wouldn’t put it on the hob and walk away. You check on its progress at regular intervals. If you don’t, your food could get ruined – and possibly your cooking pot, too. Perhaps even the hob will be damaged. I know, I’ve made that mistake.
It amazes me how many landlords treat their cooking with more attention than their property. If you ruin dinner, it costs you a few quid. If your property is damaged by errant tenants, it could cost you thousands. Maybe tens of thousands.
Periodic property inspections help you spot damage or neglect as soon as possible. Maintenance issues can be dealt with. Your property will be kept simmering nicely, instead of boiling dry.
When you make property inspections, always compare against the previous property inventory. Raise and document any issues, and have the tenant sign the new amended inventory. We recommend property inspections should be made every three months.
4. Conduct a professional check-out
In the same way that you conducted a professional check-in and walked the tenant through the property inventory, you should conduct a professional check-out. Make this after the tenant has moved their belongings out of the property so that any damage caused during the move is captured.
This inventory should be compared to the check-in inventory. Check for damage, missing items and cleanliness. Take photographs, and have the tenant sign the inventory check.
5. After check-out
You have only 10 days to notify the tenant if you plan to make any deductions from the tenancy deposit.
After this, you should compile a final report, with all photographic evidence and detailing any changes, damage, or missing items. Include a full schedule of costs. You only have 28 days from the date of check-out to do this.
If the tenant disputes your claim, you should take reasonable steps to resolve the dispute. If it is not resolved, then the case could go to adjudication or court. In either situation, a professional property inventory and evidence that you have acted professionally throughout will help your case.
Don’t rely on the good nature and goodwill of a tenant to put right any damage they have caused. The tenant will want their deposit returned, in full. If there is any way they can make this happen, they will take it. A professional property inventory is critical to avoiding disputes and ensuring that damage and missing items are paid for by the tenant and not from your own pocket.
To learn how we help to protect your buy-to-let business with comprehensive property inventories and periodic property inspections, contact Ezytrac today at +44 0 1522 503 717.
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