Understanding the importance for landlords – and tenants, for that matter – is a question of knowing what one is, how it is done, how it is checked, the role it plays at the end of a tenancy and what to do if there is any disagreement between landlord and tenant over the inventory check at the end of a tenancy.
What is an inventory?
- quite simply, it is a list of the landlord’s contents of the let property, the age and condition of each one and a general description of the state of the property, its fittings, fixtures and furnishings;
- it may be used to avoid disputes between landlord and tenant during or especially at the end of the tenancy about any damage or breakages for which the tenant may be responsible;
- since the cost of repairing or replacing items damaged by the tenant may be deducted from the deposit, it is important that the tenant knows this fact and – therefore hopefully – takes greater care of the property;
- as the National Landlords’ Association points out, it is important that the inventory is conducted immediately prior to the tenant moving in;
Deposit Protection Scheme
- the recently introduced Deposit Protection Scheme makes the production of an inventory still more important;
- the rules require you to put the tenant’s deposit for safekeeping into an approved protection scheme;
- at the end of the tenancy you and the tenant need to agree what proportion of the deposit needs to be returned;
- if you are unable to agree, the deposit remains with the Deposit Protection agent until your dispute is resolved;
- landlords typically use the inventory during the course of the tenancy to make periodic checks on any ongoing damage or breakages;
- accidental damage or even malicious damage caused by your tenants might be an occasion for making a claim on your landlord insurance if it includes these perils;
- an interval of about three months between each inspection might be an appropriate time – although it is important to remember that a tenant has the right to at least 24 hours’ notice in writing before any inspection is made;
Final inventory check
- the final inventory check is made at the end of the tenancy – preferably the very day on which the tenant moves out – when the inventory is used to compare the original condition and state of repair of items with their current state;
- if you are happy with the state in which your tenant has left your property, you may return the whole of the deposit;
- if there is evidence of damage or breakages you need to agree with the tenant the value of that damage and the amount of the deposit you intend to retain (so that the Tenancy Deposit Protection scheme may return each amount accordingly);
- even when there is agreement on any amount to be deducted from the deposit, you need to provide estimates for the remedial work and inform the tenant in writing of the sum to be deducted;
- if you are unable to agree the final inventory check with the tenant, the deposit remains in the hands of the Tenancy Deposit Protection agents until the dispute is resolved – if necessary, using the scheme’s free Alternative Dispute Resolution service.
As may be clear, therefore, an accurate and detailed inventory completed on the day in which the tenant moves in may save a great deal of heart-ache and hassle at the end of the tenancy.