Inventories and avoiding dispute
Hooray, you’ve found tenants for your rented property! Now it’s time to get all your paperwork in order. As well as the tenancy agreement, one of the most important pieces of documentation you will have as a landlord is your inventory. It helps you protect your property and prevent deposit issues with your tenants. This is our handy guide to all things inventory, including what to do if there are disputes.
If you’re worried about any issues with your tenants you should read our guide Problem tenants and how to deal with them for the best advice from our experts
What is an inventory?
An inventory lists and explains what a property came with in terms of furniture (if any) and describes accurately what state the property was in. Fixtures, fittings, and décor are all included.
You must prepare your inventory before any tenants move into your property. At check-in, your tenants should use the inventory to go around the property and note any changes to the report or agree with what is detailed within it.
It is recommended that landlords should make periodic inspections to identify any damage or changes to the property (e.g. changes to décor) and keep the inventory up-to-date.
Why do I need an inventory?
Without an inventory, you will not have evidence of changes to the property, which could be problematic if your tenants disagree on any damage or condition of fixtures and fittings. Your tenant’s deposit will be stored in a deposit protection scheme and in the event of a dispute, you will need to provide evidence to the scheme which will come from your inventory. Inventories are critical for the adjudication process and make the resolution much easier and quicker.
The quicker the process at the end of a tenancy, the shorter the period in between tenants. Also, take note that some landlord insurance providers insist upon inventories as part of your coverage terms.
What makes a good inventory?
A good inventory should list and describe the quality of the property’s contents, décor, fixtures and fittings, for both the interior and exterior. Try not to simply jot this down on a piece of paper that could be lost or damaged. You can find templates online to help you, or speak to us at haart as we can handle this part for you as part of our management services.
Remember, an inventory does not just list the items within the property, but the condition of the building and its contents too, so take photos. Having photographic evidence of the cleanliness of the property could come in very handy.
For any appliances you supply, note the serial numbers. As much information as possible should be included in your inventory, so if you think it will be important further into the tenancy, note it down.
The check-in process
Accidental damage of a rental property most commonly occurs at either check-in or check-out. If you think about it, this is when your tenants will be moving larger items of furniture in and around the property, so accidents may occur.
That’s why it is vital that the inventory is checked, agreed, and signed before the tenants move in. Provide them with a copy of the report with plenty of time before their move in date and ask them to check each room in the property using the inventory to check it’s accurate. Both parties must agree on the contents of the inventory and any photos included.
During the tenancy
It’s a good idea to check the property during the tenancy, to make sure your tenants are happy, that they are not breaching the tenancy agreement and that things are all in good working order. Inspections will also highlight any maintenance issues that need solving. Communicate fully with your tenants about these inspections so they know you will be coming.
Always document and communicate any issues raised during an inspection, in case you need that information later to settle a dispute or keep track of any changes in the property. For example, you might need to replace an appliance or fix something and that should be noted down in the inventory.
Landlords are advised to carry out property visits every three to six months but remember that you need to give at least 24 hours’ notice to your tenant and have their permission.
The Check-out procedure
Always compare the state of the property at check-out to the initial inventory report you took. Focus on things that could be cause for a dispute or affect the deposit such as cleanliness, damage, missing items, items left by the tenant, keys, and meter readings.
Once you have inspected the property, you can update your inventory accordingly and deal with anything that has come up. You will have photos to help you see any changes, which is particularly helpful if the tenancy was a long one.
If you plan to make any deductions from the tenant’s deposit, you must notify them within ten working days. A full schedule of costs should be completed within 28 days of check-out. This is all detailed as part of haart’s guide to tenancy deposit schemes.
If you cannot agree with your tenant on what should be deducted and communication hasn’t been enough to settle the matter, you can refer the dispute to the deposit protection scheme. If no agreement can be reached, the scheme must be involved.
Adjudicators from your chosen deposit protection scheme will make a decision based on evidence provided by all parties. This is why your tenancy agreement, inventory, check-in, and check-out reports are so important as without them you have no evidence.
You should know that adjudicators don’t visit the property, call you or your tenants, or request further evidence, but they will consider photographs and property inspection reports. They will, however, ask you to supply receipts or estimates for any work that has or must be completed as a result of damage to the property. The decision by the adjudicator is final and binding.
Let haart help
Of course, haart are on hand to help you as a landlord. We know you’re busy, so work to support you through our online articles, property management services, and in-branch advice. Get in touch with your local haart branch for a chat through your options as a landlord and how haart can help you.