What is an inventory? Are you keeping yours up to date? Why is it important that you do?
These are critical questions for any landlord of let property, so it might be helpful to explore why that is.
What is an inventory?
An inventory lists and describes the current condition of everything in the let accommodation. And everything means everything – from the walls to the floor and ceiling, from cupboards, to kitchen units, doors and windows, from bathroom fittings to furniture and even the state of the garden and any outbuildings. Suffice it to say that an inventory is a very detailed document.
The detail is typically illustrated by the use of photographs.
This is the inventory that provides the detailed snapshot of the contents and condition of the let accommodation the moment a tenant moves in. Landlord (or landlord’s agent) and the tenant go through the document together and agree its contents.
That said, the National Landlords Association (NLA) quotes research suggesting that 36% of tenants fail to read and understand the contents of the inventory at the start of any tenancy.
Why is an inventory important?
As already mentioned, the inventory provides a detailed snapshot of the condition of the accommodation, and its contents, the day on which the tenant moves in.
Establishing that base has become even more important since the introduction of the Tenancy Deposit Protection Scheme, which requires landlords to place the deposit generally taken from the tenant at the beginning of the tenancy with a government approved and independent third party.
One of those third parties, My Deposits, has published a guide to inventories – The ins and outs of inventories.
The reason for taking a deposit is to give the landlord a degree of security in the event of breakages and damage during the course of the tenancy. Establishing the base starting point for the condition and contents of the property is critical therefore.
The inventory prepared and agreed by landlord and tenant at the beginning of the tenancy is then compared with a similarly detailed inventory at the termination of the tenancy in order to determine any damage and breakages for which the tenant may have been responsible. This, in turn, is used to determine any percentage of the initial deposit to be withheld by the landlord in order to cover any damage or breakages.
Once the landlord and tenant agree how much of the deposit is to be returned, the appropriate sum is released by the independent deposit-taking company.
In the event of a dispute, the Deposit Protection Scheme also provides for a free arbitration service to resolve the differences between landlord and tenant.
Why is it important to keep inventories up to date?
It may be some time – especially in the case of a long-term tenancy – between agreement on the initial inventory and the changes in the condition and state of the let property on termination of the tenancy.
The longer that period, the greater the potential for disputes between landlord and tenant on responsibility for any changes in the condition of the property.
Regularly updated inventories, agreed by both landlord and tenant, therefore, may help to dispel this potential for disagreement at a later date.