The Importance of an Inventory

This month’s blog – the importance of an inventory could the the most useful document you read this month. Is it more pen-pushing paperwork, or an essential imperative for landlords? You decide. We think you’ll favour the latter way of thinking, rather than the former.

In our opinion here at Clarity Property Management, the inventories that we organise for your tenants are highly significant. Inventory documents are proof.

In other words, an inventory protects YOU and it protects your TENANT.

Since the inception of mandatory deposit protection schemes, this type of report has become a must-have. It can help ensure that your tenants leave your rental property in the same condition – less reasonable wear and tear – as when they moved in.

They hold the key to solving any end-of-tenancy disputes that may arise. Equally, they can be invaluable when negotiating the level of damages that, if any, need to be paid for.

We’ll explain how.

What exactly IS an inventory?

Simply explained, an inventory is an in-depth, detailed, independent report on a rental property and its contents. In our opinion, the importance of an inventory should not be under-estimated.

Whether furnished, part-furnished or unfurnished, it lists the furniture, fixtures and fittings in each room, as well as a description of their condition. Importantly, (and we do this), they’re carried out by an experienced third-party inventory clerk who’s NOT directly employed by the lettings agency.

The report generally includes photographs; perhaps there’s a traffic light system to indicate the state everything is in. Whatever the format, the information will be the same. You may be surprised by how lengthy, and how specific it is.

Your tenant will agree to and sign the inventory on moving-in day, along with one of our lettings staff.

Meet your inventory clerk

A piece of advice, if we may:

It’s always best to trust the experts, but especially when it comes to the qualities needed to create a high-standard inventory; the key attribute: a near-forensic attention to detail. These people would make great police witnesses.  They have specialist skills, and will carry out the inspection thoroughly and effectively.

Immediately (or soon) before your tenant’s occupation, the clerk will visit your property to check and record the condition of everything – walls, carpets, floors, skirting boards, ovens, sinks, baths, and so on, right down to the smallest mark or scratch.

Then, they will carry out the same process at the end of the tenancy, recording everything in the same painstaking manner.

What IS an EPC, and what are the current requirements?

An EPC, or Energy Performance Certificate has been required in rental properties in England and Wales since 2008, so no doubt you’ll already be aware of this. However, 2018 saw the introduction of the Minimum Energy Efficiency Standards rules, requiring all rented properties to have an EPC rating of “E” and above.

And since 2020, this legislation applies to both new and existing tenancies.

You must issue your tenants with a copy of their EPC. This is a requirement in law.

The inventory approach

These are NOT basic reports, by any means, not least because if needs be, they will have to stand up in court. As mentioned, they can be quite long, although the aim is quality, rather than quantity. Consider the following aspects:

• Extremely detailed, with full comments on the property’s condition
• Based on fact, rather than opinion (particularly important)
• List all the rooms, and the property components
• Include a cleanliness schedule
• Incorporate photographs

What does an inventory clerk look for?

Not to put too fine a point on it – many, many things.  

As they move from room to move, they spy everything, and miss nothing. For instance, their checks at the start of a tenancy may include the following:  

• Damage to floor or walls, including dents, holes or stains
• Curtains and carpets – stains, marks etc
• Windows and doors – damage to seals, or whether there are any chips or marks
• Mould or mildew in the bathroom
• Cupboards and doors – whether the doors are warped, there are broken hinges or if the doors stick
• Tap water pressure
• Cracks in sinks or tiles
• Appearance of gas and electrical appliances
• External appearance – gutters need cleaning, and are there any missing slates or tiles?

Your tenant’s redress

Should your tenant disagree with any of the findings in his or her move-in inventory, or they find additional fixtures or fittings not covered, they have the right to update the inventory, as they see fit. For example, the report may mention one mark on the kitchen table, when in fact there are two – therefore they’re within their legal rights to amend this, and to secure a counter signature.

Property inspections

We’ll arrange regular inspections, but here, the focus is slightly different.

On the whole, these pre-arranged on-site appointments aren’t designed to keep tabs on tenants, rather to ensure that everything is running smoothly, and that there are no serious issues with the property.

Moving out and the final inventory check

Ideally, the same checking process will happen on the day the tenant moves out, or at the very least almost immediately afterwards – with the second form compared against the original. It will then be reviewed, agreed and signed by the tenant.

As a landlord, you’ll need to factor in “normal” wear and tear, such as carpets being a bit worn, and perhaps even small scuffs and scrapes. Don’t worry – if you’re not sure, we can advise what this would look like in real life, so to speak.

Generally, we’ll return your tenant’s deposit within 7 to 14 days after they have left your property.

Is there damage to the property?

OK, you may be in a strong position here.

Should there be issues after the tenant has left, as evidenced in the final confirmed inventory, it will be possible for you to withhold some (or even all) of his or her deposit. But, as you would expect there are precise procedures to be followed:

• You’ll need to inform the tenant of the amount to be deducted in writing.
• If there is severe damage, and cost of repairs is greater than the original deposit, your inventory report can be your forearmed-forewarned tool to recover your money. You will be within your rights to send an invoice to your former tenant, iteming the costs for which they are liable.
• Be aware: this may not be the decisive step. There may be disagreement about the amount owed. Contact us and we can advise you what to do next – something called an Alternative Dispute Resolution service, for example, provided by the scheme the deposit is secured with.

In conclusion

Nothing is, or ever can be, watertight.

But, as in many areas of life, an inventory offers you much stronger protection than NOT having one. Or, trying to put an important document such as this together yourself.

Even if your property is as clean, tidy and immaculate as a new pin, an inventory report is vital. It may not stay that way, and you’ll need evidence. Here at Clarity, we deal with life as it is, rather than as we would like it to be.

And, damage to your property could be a fact of life. Let’s talk about an inventory. Just another thing to tick off your list, for your peace of mind.