A guide explaining what a tenancy deposit scheme is, how they work and how their dispute resolution services can help private landlords and tenants.
Before the keys are handed over at the start of a new tenancy, a property inventory should always be drawn up. Savvy tenants and professional landlords both need to understand the importance of having this vital document in place.
It’s the only way a landlord can legitimately invoice for the costs of any damage or loss incurred during a tenancy, and the only way for a tenant to prove they weren’t responsible for it.
Here we explain what an inventory is, what should be included, why it’s important and what can happen if it’s not as thorough as it could have been.
What is a property inventory?
A property inventory is a document detailing the condition of the property and its contents. From the age of the washing machine to the state of the paintwork, it’s a comprehensive report designed to protect properties and avoid deposit disputes.
These assessments are carried out twice: once at the beginning of the tenancy and once at check-out. Having one drawn up and signed by both tenant and landlord helps to make the handover smooth and straightforward. Without one, or with an inadequate one in place, the chance of a disagreement over a stained carpet or cracked sink is greatly increased.
Why are property inventories important?
There are many reasons why having a thorough and objective inventory is advisable:
Conducting a check-in inventory provides both landlord and tenant with an accurate picture of the current condition of the property
Conducting a check-out inventory provides the same at the end of the tenancy so both reports can be easily compared
Any discrepancies can be used to determine how much of the deposit should be returned and lessens the chances of a deposit dispute
In the event of a deposit dispute based on this assessment, a fair and accurate inventory can be used as evidence and speeds up the resolution process
An inventory can highlight those areas that need addressing and show who is responsible for what
The details will help tenants appreciate how the property should be maintained and in what state it should be returned to the landlord
Inventories protect the landlord’s investment and the tenant’s deposit
All parties can use the inventory to easily distinguish between damage and expected wear and tear
Following the correct guidelines and communicating at every stage of the process helps to build trust between landlord and tenant
What should be included in a property inventory?
Inventories are highly advised for all rental properties, regardless of whether they’re furnished or unfurnished.
They should both list and describe the condition of the following on a room-by-room basis:
Contents including furniture, curtains and carpets, wooden, laminate and vinyl flooring, and appliances
Fixtures and fittings including doors, door handles, locks, banisters, bathroom suites, kitchen units, taps and sinks
Interior décor including paintwork to walls, ceilings, window frames and sills, skirting boards, staircases and door frames, along with wallpaper and any other form of decoration
Any areas prone to damp and how this should be minimised
Level of cleanliness and expected standard to be maintained
Items such as alarm and intercom systems, smoke alarms, Co2 detectors and fire extinguishers
Gas appliances including ovens, fires, boilers and radiators
Exterior items such as fencing, paintwork, aerials and satellite dishes, plants and trees, lawns and outdoor buildings including sheds and garages
It’s highly advisable to add photographs, preferably digital ones where the date they were taken can be verified. These images can be used as crucial evidence in the case of an end-of-tenancy dispute.
Proof of compulsory gas and electricity safety checks can also be included in the inventory, along with confirmation of the Energy Performance Certificate.
The inventory should also include a declaration page at the end for signatures from all relevant parties.
How to use a property inventory effectively
Landlords are best advised to have an inventory completed before the tenant moves in. Accidental damage is most likely to happen during check-in or check-out as personal possessions are moved in, so making sure an accurate record of the property’s condition before this day is vital.
At check-in, tenants should use the inventory to cross-reference each point and note any differences they spot. Taking the time to do this will mean any existing but undocumented damage or defects won’t become their responsibility when check-out day arrives. The landlord can also use this opportunity to accompany them and ensure nothing has been missed.
Once both parties are happy that the inventory is accurate and complete, it can be signed and the keys can be handed over to the tenant. Don’t underestimate the importance of adding dated signatures: many deposit claims are rejected because the inventory was never signed.
Throughout the tenancy, landlords should make periodic inspections, ideally every 3-6 months, to identify any damage that does not correspond to the inventory report. Any issues should be documented and communicated to the tenant in case evidence is required at a later date.
And with four weeks to go before the end-of-tenancy date, it’s a sensible and friendly idea for landlords to remind tenants of their responsibilities and give them time to remedy any issues.
At check-out, both parties should be present when the check-in inventory is compared to the current condition of the property. A second report should be made detailing any areas that need attention, split into sections to show whether the tenant or landlord is responsible for each point.
Areas to focus on include cleanliness, damage, missing items, gardens, keys and meter readings. Take new photographs to compare with those taken at the beginning of the tenancy and embed these within the report.
With the initial and revised inventories complete, it should then be easy to spot any deductions that need to be made from the deposit.
Who can carry out a property inventory?
The best property inventories are those compiled to a professional standard, preferably by an unbiased third party.
Using a reputable independent inventory clerk, a service offered by MakeUrMove, means the document will be expertly produced, impartial and backed up by the Association of Inventory Professionals. They’ll also know the common issues that disputes are centred on and pay special attention to these areas.
While they can be drawn up by the landlord themselves, or by the letting agent, those completed by independent agencies are looked on more favourably if a dispute should arise.
The three government-approved deposit protection schemes all advise using an independent inventory service to gain agreement quickly and avoid potential disputes.
What to do if a deposit dispute arises
After cross-referencing the two inventories, a deduction may need to be made from the deposit.
Usually, this is agreed amicably and the correct amount is returned to the tenant from the landlord’s chosen deposit protection scheme.
But in a small number of cases, estimated to be as low as 2%, this figure can be contested. Which can be stressful, costly and time-consuming for all.
The best approach is to try to resolve the issue through clear communication using the inventory to discuss the matter in an informed way. Without a thorough inventory, this process is significantly more challenging.
If this fails, the dispute should be referred to one of the three official deposit protection schemes. They’ll request copies of the check-in and check-out inventories as evidence to use during the adjudication process.
The adjudicator won’t visit the property, call the landlord or tenant, or request further evidence, so having the right paperwork available to them at the beginning is crucial.
Armed with the information in the inventory, along with the tenancy agreement and receipts or estimates for any work done or required, they’ll be able to reach a decision much quicker. And the quicker the process, the shorter the void period between tenants and the sooner everyone can move on.
The scheme aims to resolve disputes within 30 days and once a ruling is issued, this is final and binding on all parties.
The following cases have recently been seen at Make Ur Move. Each one proves the importance of completing a comprehensive inventory at the start of every new tenancy agreement:
A tenant claimed that a carpet already had a stain on it and disputed the request to pay to have it replaced. The check-in inventory clearly confirmed it was a newly fitted carpet at the start of the tenancy, so the dispute resolution service wasn’t required.
A landlord claimed for replacement lightbulbs while the tenant argued that none were working when they moved in. Photographic evidence in the inventory proved they were functioning properly and the claim was dismissed.
A tenant claimed there were no oven trays or grill pans in the kitchen when they moved in. The inventory clearly showed them photographed inside the oven. The tenant had disposed of them due to burnt-on stains and not replaced them. Another case of being caught out by the inventory.
A landlord claimed mattress protectors had been provided but these weren’t included in the inventory which consisted solely of a list. With no mention of them and no photographic evidence, the claim didn’t succeed.
You can read more tales of challenged deposits here.
With a factual, objective inventory in place, landlords and tenants can build a trusting relationship which will dramatically minimise the chances of a dispute arising.
Remember that no inventory means no evidence. So producing one that’s both fair and accurate will make life easier for all.
Find out more about MakeUrMove’s comprehensive range of landlord services.