One of the biggest (and most expensive) mistakes landlords make is skipping past the process of compiling a thorough property inventory at the start of a tenancy.
Bypassing an inventory is a reliable way for landlords to unnecessarily overspend on repairs and dispute with tenants at the end of the tenancy, which is why they are critical and why every landlord (and tenant) should ensure there is one in place.
Special on Professional Landlord Inventory Services
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What is a Landlord Inventory?
A property inventory is a detailed report which records the condition and cleanliness of each room and its fixtures and contents of a rental property at the beginning of a tenancy. They are also often referred to as a “schedule of condition“:
A landlord’s inventory is usually documented by a form and supplementing pictures, and then referred to at the end of the tenancy, so it’s easy to determine if there are any damages that the tenant is liable for.
Disputes over repairs at the end of the tenancy are incredibly common, but with an inventory in place, it makes it much easier to prevent them. Property inventories are put in place to help protect both landlords and tenants, so no one is unfairly made liable for damages they are not responsible for.
Why landlords and tenants should always have a property inventory
- They help remind both tenant and landlord what the condition of the property was at the beginning of the tenancy
- They avoid (or at least, reduce) disputes, because inventories help determine who is liable for any damages
- If there is a dispute over any damages and the matter escalates to adjudication, an inventory will play a vital role in reaching a solution
- Without an inventory, landlords will have a terrible time recovering any costs from the deposit if the tenant disputes the claims. A tenancy deposit adjudicator will require evidence for any claims, so it will be not sufficient to say, “the property was left in bad condition so I need the deposit to rectify it”
The process of an inventory
- If you’re using an agent or independent inventory clerk to handle your inventory, they should advise accordingly how the process will work.
- If you’re going to conduct the inventory yourself, you should prepare the inventory on the move in day (or shortly before, assuming the property is in the exact condition the tenant is going to receive it in) with the tenant present.
- The inventory should be conducted before your tenants move in with any of their possessions. Any faults with the property or any items should be documented in the inventory form.
The inventory should also document the condition of every item and attribute of the property, in a grading style, from “excellent” to “poor”, with relevant assisting notes and photos if necessary.
- Photographic or video evidence of the property contents and condition is recommended. I’ve retrospectively written an elaborate blog post on how landlords should prepare an inventory and take supporting images – I would highly recommend reading that before compiling your inventory.
- After the inventory is complete, every item should be agreed on by both landlord and tenant and signed off by both. The landlord should keep a copy and one should also be issued to the tenant.
When should the inventory be cross-checked?
It is common, and advisable, for landlords or agents to make regular inspections.
Inspecting on a quarterly basis (every 3 months) to compare the inventory with the current condition is normal practise.
It’s important to remember that a tenant needs 24 hour notice in writing before an inspection is made. You can download a property inspection notice from here.
Any obvious signs of damage should be flagged and discussed with the tenant.
The final inventory check at the end of tenancy
On move out day the landlord should complete a final inspection to assess the condition of the property, referencing the inventory.
The final inspection should be completed with the tenant present, and only after all their possessions have been vacated from the premises. Note, a lot of damage is caused while tenants move their furniture/possessions in and out of the property!
Oh, yeah… “Wear and tear”! Let’s discuss it.
It’s important to note that tenants cannot be held liable for “fair wear and tear”, and it should not be flagged as signs of damage when cross-referencing the inventory during the final inspection.
“Fair wear and tear” refers to any consequences of “reasonable use of the premises by the tenant and the ordinary operation of natural forces.”
So, for example, carpets naturally wear overtime with normal use, which means landlords can’t seek compensation to replace carpets if they’ve naturally worn away over normal usage. Here’s a more in-depth guide on wear and tear.
What happens if items have been damaged?
If there’s a general consensus between the parties on what has been damaged, then estimates should be drawn up for repairs/replacements. The tenant should be informed of all the costs in writing and amounts of deductions from the deposit.
A tenancy deposit scheme should be holding the deposit, so they should be made aware of what has been agreed, so they can distribute the deposit accordingly.
If the deposit doesn’t cover the amount needed to carry out the repairs, an invoice itemising all costs involved for additional payments should be sent to the tenant.
If items need to be replaced then it’s the landlords obligation to consider betterment. This means that the original age and condition of the replaced item should be taken into account when estimating the replacement cost.
What if the landlord and/or tenant cannot agree on damages?
If both there is a dispute over which items have been damaged, the severity of the damage, or any associated costs to repair damages etc, then great care should be taken in:
- recording the state and condition with photographs
- obtaining estimates and repair or replacement costs
- informing the tenant/landlord in writing
All disputes should be handled by an independent and free Alternative Dispute Resolution (ADR) service provided by the scheme the deposit is secured with, which will aim to resolve any disputes quickly and without the need for court action.
Each scheme will contain an alternative dispute resolution (ADR) service, so both tenant and landlord will need to contact the appointed scheme. If both landlord and tenant agree to use the service, they will have to agree to accept its decision and will not be able to apply to the courts.
When damages exceed deposit amount
If there’s an excessive amount of damage to the property and the cost for repair exceeds the value of the deposit, the tenant should cover the over-spill (assuming they are liable). However, in the event that the tenant is unwilling to pay the extra, your only option might be to apply to a court for a claim if you wish to recoup the costs. Please refer to my blog post on when tenants cause damage for further details.
Should I bother creating an Inventory for an unfurnished property?
The short answer is yes. Even if a property is deemed as unfurnished, there will still be items that can be damaged and costly to replace e.g sinks, carpets, condition of walls etc. Consequently, it is still crucial to have a detailed inventory.
Using an Independent Professional BTL Inventory Clerk
LettingAProperty.com currently offer inventory services from £99. More details below…
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*The cost of the landlord inventory service is determined by the size of the property, the number of bedrooms and whether the property is to be let furnished or unfurnished. Cost starts from £99.
Using an independent inventory clerk to conduct and document the inventory is definitely the recommended option [over landlords doing it themselves]. An inventory is very time-consuming, and by using a professional, you can be assured that it’s done properly.
The cost for an independent clerk can vary depending on the size of the property, and whether it is furnished or unfurnished. As a rough guide, you could be looking at approximately £100 for an unfurnished property, while £130 for furnished. It’s always worth shopping around for the best rates.
If you want to do your own inventory, you might want to download the free inventory form below…
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.
Any documents you download from this website are just examples of its kind and should be checked by a professional. I give no warranties or representations concerning the documents, and accept no liability in relation to the use of the documents.