A few days ago I wrote an article explaining how and why I thought it’s important to perform a thorough Inventory. This time I’m going to talk in detail about the entire process of protecting the security deposit. Why? Because I’ve recently taken a financial hit (lost £200) because I was sloppy with my inventory. It’s a long and shitty story, which I’ve already briefly spoken about. But basically, my ex-tenant left my property with a few battle wounds (the property has the wounds, not my tenant, unfortunately), but because my inventory wasn’t up to scratch and she wasn’t willing to accept blame, it was my word against hers. However, in my defence, the inventory was done by a letting agent, and it was 4 years ago, at the beginning of my Landlording career.
Security deposits must legally be held by a Tenancy Deposit Protection Scheme. The scheme is a third party organisation- they’ll hold the deposit and act as moderators if there are any disputes at the end of the tenancy.
The moderators will act like a jury, where they’ll take into consideration all the evidence if there is a dispute between landlord and tenant. For example, if the landlord is trying to claim for a broken window while the tenant is claiming it was already broken, then it’s ultimately the tenant’s word against the landlord’s. In those cases, the tenant may rightly or wrongly so, walk away with the full deposit. The landlord has to prove their case.
Here are the steps I take these days to try and justifiably protect the security deposit over wear and tear:
STEP 1: Check the property thoroughly
Before any tenant is moved in, take time to inspect the property. Check all fittings carefully. And believe me when I say you can’t be too careful. These are some of the checks I perform:
- Check that all door and window locks are working
- Check there are no cracks in windows
- Check the water flow from all taps
- Make all all plug points and light switches are working
STEP 2: Get tenants to highlight any damages before moving in
Before your tenants moves in with any of their belongings, examine the property with your tenant and get them to pick out any faults with the property. Any faults should be documented together in an inventory form. This also includes furnishings with furnished properties. Also go over the specific checks you did on your own.
The inventory shouldn’t just document the faults, it should generally document the condition of every item and attribute of the property, in a grading style, from “excellent” to “poor”.
STEP 3: Take pictures
Again, before your tenant moves, take pictures of each room so there is clear proof of what condition the property was in before the tenant moved in. Take extra shots of expensive fittings like windows, doors and furnishings.
Photos should be taken while the tenant is in sight, so there is no confusion. Here’s a more in-depth article on how to take pictures of your inventory– it’s well-worth reading!
STEP 4: Agree on the inventory
Go through the photos and Inventory Form with your tenant. Once agreed, both parties should sign the inventory. Each party should have copies of the photos and inventory.
STEP 5: Property Inspection
Landlords should ideally perform inspections on a quarterly basis. During those inspections, refer to the inventory and make sure everything is still in good condition. If there are scuffs on the walls and spills on the carpet, just take note and inform the tenant that it’s been noted. I would also take pictures again at this point.
A lot of tenants get on their knees and scrub, and also repair minor issues before they move out because they want their deposit back. So the wear and tear seen during inspections may only be temporary.
STEP 6: Final Inspection
Always do a final inspection with your tenant AFTER all their personal belongings have been vacated from the property. A lot of the damage is done when moving furniture in and out of the property. Go through the entire documented inventory.
Check in, under and around all furnishings. It’s amazing how many ways wear and tear can be masked by strategic positioning of lighting and furnishing.
If you notice anything which needs financial attention, take a picture so you have before and after pictures.
If everything is done accordingly and thoroughly, it would be extremely difficult for disputes to erupt, or at least end unfairly. I think the key concept is to perform these inspections with your tenant next to you, to minimize confusion and conflict.
But remember, if there are disputes and it’s left to the moderators to resolve the issue, it’s better to be prepared.