What is an inventory?
An Inventory is also known as a Schedule of Condition and is an account of the condition of a property and a list of contents. Schedule of Condition is a more apt description as it isn’t just about the contents, it is also the condition of the fabric of the property, such as carpets and decorative order. The inventory is designed to help monitor the condition of the property and contents before the tenants move in, during the tenancy and as the tenant leaves, so it can be made clear what damages (dilapidations), if any, need to be paid for out of the deposit. The inventory should also include gardens, parking/garage and any items that the tenants have the use of.
An Inventory is just as important for unfurnished properties as it is for furnished, after all there are still carpets, kitchens, bathroom fittings and the overall decorative condition of the property to consider.
How is an Inventory prepared?
The Landlord, Letting Agent or an Independent Inventory Clerk should prepare the Inventory which should be handed to the tenant for them to check and return within an agreed period of time. The tenants should sign the Inventory and initial every page to signify agreement.
Although a landlord can produce their own inventory, it is recommended that a third party produce it, usually the agent or an Inventory Clerk.
Photographic evidence of the property contents and condition is recommended, it is much more difficult to argue with photographic evidence, after all a picture paints a thousand words.
If compiling the Schedule of Condition yourself it is important to be accurate, concise and use photos to show the condition of the property and contents.
Should the property condition be checked regularly?
It is advisable, for landlords or agents to make regular inspections when managing a tenancy. Inspecting on a quarterly basis to check the current condition should be perfectly acceptable to both parties. It’s important to remember that a tenant needs 24 hours notice in writing before an inspection is made.
What about at the end of the Tenancy?
Once the tenant has handed the keys back the Landlord, Agent or Inventory Clerk should undertake a final inventory/schedule of condition inspection. The inventory must be checked and agreed with the tenant before agreeing the return of the deposit or any remedial works, including cleaning, not forgetting to take into consideration fair wear and tear (betterment) for the length of time the tenant has been in residence.
It’s imperative that the inventory is checked immediately after the tenant has ended the tenancy, so there can be no argument about any damage occurring after the tenant has gone. The deposit should only be handed back within 7 to 14 days if there are no outstanding issues when the inspection is complete.
What about damage to the property or items?
If there is agreement between the landlord or agent and the tenants regarding 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 which will be taken from the deposit.
Any tenancy that commenced after April 2007 it is required that the tenancy deposit be registered with a registered Deposit Scheme, 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 the tenant is insured, this evidence should be provided for the insurance company.
If items need to be replaced 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 there is disagreement about 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 tenant do not agree to use the Tenancy Deposit Scheme service then the dispute will usually go to the county court.
