What makes a good inventory.

This month i want to talk about how important an inventory is when you are renting or managing a property. Below are my thoughts on this;

No matter whether you’re letting a?furnished or unfurnished property, creating an inventory is very important. Sometimes called a schedule of condition, an inventory will help to protect the position of both landlords and tenants. It can also provide evidence of the condition of the property at the time it was let.

How to prepare

You should always take care when preparing an inventory. Here are a couple of key things to bear in mind:

• Make a detailed list of all the belongings and furniture provided when a tenant moves in.
• Record the condition of these items, as well as things such as walls, doors, windows and carpets.
• Before you start to note the condition always take a walk around the property, so you can familiarise your self with the layout and the general condition. NB – I always order the rooms from left to right.
• Take your time and never just rely on photos always accompany a photo with a written description. This will help if you do go to dispute over the deposit upon check out.
• Treat the room like a box walls, floor, ceiling. Then focus on the detail within the room. KPR make this easy by breaking the room into several sections and in the form of a checklist, ensuring that no detail is missed.

How to document evidence

Everyone has their own way of doing this, and its success will likely depend on the amount of time and effort you’re willing to put into it. If you do choose to produce your own, we recommend you follow these basic tips:

1. Start from the entrance and work your way through, room by room.
2. Record the overall cleanliness and decorative order.
3. List all the items of furniture and give a brief description of their condition.
4. Aim to take?at least?four pictures of each room.
5. Photograph areas particularly noteworthy or valuable.
6. Do it as close as possible to the tenancy start date.

?Point 5 is important. For example, if your oven and hob has just been professionally cleaned, it would be good to take photos as evidence and for it to be marked as professionally cleaned. Equally, think about other areas that have a reputation for creating (and hiding) dirt, such as shower heads and screens, the inside of the toilet, dishwasher, and washing machine.

The more detailed the inventory, the better. For instance, if the inventory simply records ‘four chairs’, and says nothing about whether they match, or about their quality or condition. When the tenant checks out they can potentially leave any random 4 chairs.

A good practice is to give the tenants a set time frame (7 days is normally sufficient) in which to go through the inventory and note down anything that they don’t agree with. Once returned make sure that all parties have signed the report and a copy is kept on file. This can be stated in a clause in your AST or within the actual inventory report itself.

When to conduct an inventory

If you’re unable to arrange an inventory for the same day the tenants move in, it’s worth considering pushing the start date back. While some tenants might try and appeal to your better nature to be more flexible on the move in date, landlords still need to protect themselves: it’s only really the tenants who stand to gain from anything otherwise.

For example, if the tenants have already moved in, it will be difficult to differentiate between the tenant’s belongings and the landlord’s, vastly reducing the accuracy of the report.

This is most important when it comes to the check out. If the tenants are checked out before they leave the property, you leave them open to make further changes; if they are checked out after they’ve left, they might be able to argue that alterations were made since vacating the property. Doing the check out on the day the tenants hand back the keys is the only way to be truly accurate, and to be sure landlords are not left vulnerable.

Make sure it’s signed and dated

An inventory is a legally binding document, so if it isn’t signed and dated it’s not worth the paper it’s printed on. Without a signature, there is no evidence that the tenant agrees with what’s been observed. In fact, an absence of a signature will likely suggest that the tenant?wasn’t?happy with what’s been observed, and that’s why the document was never signed.

Using Photos within an inventory

Many inventory clerks will use photographs to document the condition of a property prior to it being let. This is a good idea, particularly if the property contains furnishings of a high value.

However, the use of digital photographs is not always accepted by the courts as evidence, so having a written description along with the photos is generally advised. KPR software automatically date and time stamps the photos and embeds them within the relevant section of the report and allows you to caption each photo, again helping you back up the written description of the item.

With some properties, landlords and agents are now also taking videos. However, videos have more limited value in terms of dispute resolution as they are much harder to work with.

Why are inventories useful?

A thorough and detailed inventory will help avoid disputes,?particularly those involving the return of a deposit. For this reason, it’s worth making sure that you keep all receipts from any work which is carried out during the tenancy.

Remember that if there is a dispute over the condition of the property, and this goes to court or a deposit scheme adjudicator, it will generally be your responsibility to prove the claim and provide evidence of the original inventory signed by the tenant and any communication from during the tenancy.

Should you need to raise a deposit dispute at the end of the tenancy, providing invoices, receipts, quotes, and estimates of any services rendered or needed will go far in strengthening your case. Most tenancy agreements will specify that any damaged items should be replaced with a matching or similar article of equal value. However, in some cases it might be necessary to prove just how much that item was worth in the first place.

This might mean holding onto some documentation for the duration of the tenancy but doing so will bear fruit should you come to rely on it in the future. For example, it’s useful to retain an invoice if your property was professionally cleaned at the beginning of the tenancy, especially since a professional inventory clerk will ordinarily record this and confirm sight of it.

Remember, an adjudicator is looking for evidence as to why your deductions are justified, so providing an estimate or quote from a professional in the field will help them come to a decision quicker.

Final thoughts…

Compiling an inventory is one of the best ways to build a healthy relationship with your tenants, as all parties will know what’s expected of them; it allows you to avoid disagreements over the property’s condition upon check out. While it might seem as though inventories are designed to catch your tenant out, this is simply not the case: it’s a useful document for them to have so that they have something to refer to as the tenancy ends. Your expectations are then always set as to how the property should be returned.

Next month i'll be talking about how important midterm inspections are.