One of the biggest (and most expensive) mistakes landlords make: waltzing past the process of compiling a thorough property inventory, which details the condition of each room and its fixtures and content at the start of a new tenancy.
Don’t be that kind of landlord or tenant, because it’s a sure-fire way of getting your pants pulled down and paying through the nose!
Special on Professional Landlord Inventory Services
LettingAProperty.com are currently offering professional inventory services from £99 (Inc VAT), which is conducted by an inventory clerk accredited by the Association of Independent Inventory Clerks (AIIC). Quick & easy online orders!
What is a Landlord Inventory?
An inventory for landlords is a detailed report of all the contents of a property and a record of the condition of the rental property. It’s also referred to as a “schedule of condition“:
A landlord’s inventory is typically documented by a form with supplementing pictures, which records the condition of the property/items before a tenant moves in, and then referred to when a tenant vacates, so it’s clear what damages, if any, need to be compensated for.
Sadly, inventories are often skipped by landlords and not required by tenants, which is a major mistake (perhaps one of the biggest rookie mistakes). An inventory is there to protect all parties, in particular to help assist with handling damages (which is an extremely common reason for dispute).
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 do the inventory yourself, you should prepare the inventory on the move in day (or shortly before, assuming the property is completely ready) with the tenant present.
- The inventory should be conducted before your tenants moves in with any of their belongings. Any faults with the property or any items should be documented in the inventory form.
Of course, the inventory shouldn’t just document the faults, it should 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 compiled, it should be signed off by both parties and each should have their own copy for reference.
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 in correspondence with the inventory.
The final inspection should be completed with the tenant present, and only after all their possessions has 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.
“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 parties cannot agree on damages?
If the parties cannot reach agreement as to which items have been damaged, the severity of the damage, the repair or replacement costs 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 will 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. If you or your landlord do not agree to use the Tenancy Deposit Scheme service then the dispute will usually go to the county court.
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 can save you time and problems. They’re professionals, so they’ll ensure everything is accounted for properly in the inventory at the beginning and end of the tenancy.
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 properties. In any case, it’s always worth shopping around for the best rates.
If there is a disagreement at the end of a tenancy between landlord and tenant, which needs the assistance of a tenancy deposit protection schemes dispute resolution service, the independent inventory clerk’s report will be a vital piece of evidence to help resolve the situation fairly and quickly. This is where the initial cost of an independent clerk can be a very wise investment.
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.