I’ve been out and about again this week but this time it was for an enlightening course about inventories, deposits and end of tenancy disputes hosted by EMPO in Nottingham.
Inventories and deposits, we all know about them but do all landlords bother with them? Despite there importance, there are landlords out there that take the risk to do one or the other or worse, neither. A detailed inventory, reasonable deposit and a clear, timely check out report will make the difference between having a strong case or no case in a dispute.
NO inventory + NO check out report = NO case
Do you know that its free for a tenant to dispute a deposit claim? In 10 years, a tenant could have 10 tenancies which could mean 10 disputes, in a system that appears to favour tenants rather than landlords, how often do you think the landlord loses out…
Firstly, you need to get a deposit and register it deposit with a tenancy deposit scheme otherwise you’re not going to have anything to protect you in the first place. As part of the Housing and Planning Act 2016, you must register your tenants deposit with a tenancy deposit scheme within 30 days of receiving it, if you don’t you could end up repaying your tenant up to 3 times their original deposit within 14 days of the order. TDS schemes give you two options:
Custodial – a free option where they hold the money for you.
Insured – a chargeable insured option where you hold the money.
Whichever option you go for, it will only take you a couple of minutes to register the deposit so there’s no excuse!
Next you need to get yourself a cracking inventory, time consuming to do but they are worth their weight in gold when it comes to the end of the tenancy. You can do it yourself, use an independent inventory clerk or get your local letting agent to do it as part of their tenant find/managed service then its up to you decide if you want written, photographic, video based, a voice recording or combination. Speak to your agent/inventory clerk to find out what their method is, whatever you decide, make sure your property is tip top and in the condition you would like it back otherwise it’s a waste of time and money…mostly time! Make sure your tenant signs the inventory at the check in or cover your back and add a disclosure that states after x amount of days that if no amendments are requested then it is taken that they are happy that the inventory reflects the condition of the property.
Quick note, even if you have had the property professionally cleaned before your tenants move in, you cannot demand a receipt at the end of the tenancy for a professional clean, you can only request that it is cleaned to a professional STANDARD. If you choose to put it in the tenancy agreement and the tenant doesn’t provide a receipt for the clean but the property is cleaned to a professional standard then the tenant is likely to win in a dispute.
Property visits throughout a tenancy are crucial and the information and evidence gathered at each visit can prove to be priceless in a dispute, whether it’s photographic proof of washing being hung out indoors without ventilation, pet beds, toys and food in an AST that states no pets and even tabacco/cigarettes on the side could help to prove how a cigarette shaped burn just appeared on a carpet. No evidence = No case.
Lastly you need a check out report and a timely one at that, you can’t roll up a week or so later to take photos and meter readings and expect a dispute to be taken seriously. A check out report needs to be conducted on the final day of the tenancy at a time agreed with the tenant, it doesn’t need to be anywhere near as detailed as an inventory however you still need to photograph the keys and take meter readings, but it only needs to highlight any issues and discrepancies from the original inventory. Make sure the inventory is to hand along with any correspondence you may have had with the tenant throughout the tenancy agreeing any changes so you can walk around the property with them and highlight any issues, this way the tenant is prepared for potential deductions. The tenant must be made aware of any deductions within 10 working days of the tenancy end date, you will need quotes to prove your deductions and you will need an agreement in writing of any deductions from your tenant. If the landlord and tenant can’t agree on the deductions then noone gets any money and it has to go to dispute so make sure you have plenty of strong evidence.
I’m not going to unearth the can of worms that is fair wear and tear because i’ll be typing away all night about that but in conclusion, if you have a cracking inventory, a good deposit, routine visit reports and a timely check out report then you can at least say you’ve ticked all of the boxes in what appears to be a tenant friendly dispute system. Only 1% of deposit resolutions go as far as requiring the independant dispute system so i hope that you can negotiate amicably with your tenants and stay out of that minority.
If you’d like to pop in for cuppa and a chinwag about deposits, inventorys and how we do things then i can always make time for a chat :).