The Importance of a Property Inventory for Landlords (and tenants)

Content

• What is an inventory?
• What is the purpose of an inventory?
• Are there any regulations?
• Should I have an inventory for an unfurnished property?
• The process of completing an inventory
• The importance of an inventory
• Photographic evidence
• Top-level points to include in an inventory
• Software for managing multiple inventories
• Property inventory templates

Why a Property Inventory is important

First, we’ll briefly cover a few common questions regarding inventories before exploring the importance of supplying tenants with an inventory.

What is a Property Inventory?

An inventory is a document which serves as a written checklist of the entire contents and condition of a property prior to tenants moving in.

The inventory can protect both parties;

Landlords can claim a portion of the tenants’ security deposit at the end of the tenancy if any items listed in the inventory are damaged or missing. However, tenants are not liable for “fair wear and tear” of the property.

Tenants are also protected by the inventory – A landlord will be unable to claim part of the security deposit if something is damaged but was not listed in the inventory, nor would they be able to claim that an item which rightfully belongs to the tenant is part of their property.

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What is The Purpose of a Property Inventory Checklist?

Landlords and management companies provide tenants with an inventory at the beginning of their tenancy, which is then to be signed by the tenants.

The inventory confirms that tenants understand what fixtures, fittings and furnishings should remain at the end of the tenancy and what condition the property should be left in. The document will also usually specify costs for any damages or lost items, which the tenant is liable for.

If any point listed in the inventory is missing/damaged at the end of the tenancy, the costs of replacements or repairs will be taken from the tenants’ security deposit.

Are There Any Regulations to an Inventory?

Inventories are not legally required like a tenancy agreement is, however it is highly recommended that you supply your tenants with an inventory at the beginning of their tenure.

Should I Create an Inventory For an Unfurnished Property?

Many believe that an inventory is only necessary for internal furnishings, such as sofas, tables or kitchen appliances.

However, it is recommended that even an unfurnished property should have an inventory;

An inventory does not just include furniture and appliances – everything should be included within the document, from light switches, to door handles and floorings, including the condition of these items.

The Process of Completing an Inventory

Completing an inventory is a fairly straightforward process; the most time consuming part will be compiling all of the features of your property into the document.

• Write down in rough, everything in your property, light switches, flooring, furniture, fixtures, appliances etc and their current condition.

• Create the inventory document. You can use a template to create the inventory or start from scratch.

• Provide your tenants with the inventory at the beginning of the tenancy. Ideally, you’ll want them to sign it and return it to you as quickly as possible.

• Keep a signed copy somewhere safe, where it won’t get lost.

• At the end of the tenancy, you’ll then need to go through your inventory whilst checking each point in the document in person, noting any damages/missing items.

• If the property is left in pristine condition, you can release the tenants’ security deposit, or if there are damages/missing items then you’ll need to create a case with the deposit protection service (DPS), if the tenant disputes it.

The Importance of Having a Detailed Property Inventory

Again, it is highly stressed that you have an inventory. Not only does it protect both you and the tenants from damages or false claims, it will help resolve any complications and disputes which occur during or at the end of the tenancy much faster.

Tenants: It is important that your landlord has provided you with a detailed inventory. If the inventory provided to you only specifies a few things, you should request that the landlord updates the document.

This will protect you at the end of the tenancy, provided you have not caused damage which is not classed as fair wear and tear.

Landlords: Without an inventory, it is highly likely that any deposit claims will be favored to the tenant, as you’ll have no evidence stating the condition of the property pre-tenancy.

The inventory will also allow you to have confirmation from the tenant(s) that they agree to any security deposit deductions if there are any missing/faulty items at the end of their tenancy.

You should also ensure that you include absolutely everything possible in the inventory; including the condition of each item. Don’t forget to include the electricity, gas and water meters within the inventory, noting their readings at the beginning of the tenancy.

For example, the walls – the inventory document should note if the walls are painted or have wallpaper and what condition they are in.

Due to having the tenants sign the inventory, they will be paying closer attention to the interior condition of the property upon move-in, which may cause them to be more careful not to break or damage the property.

If anything were to break during the tenancy and the tenant was at fault, they would understand the costs of repairs as stated in the inventory. However, some appliances, such as the boiler, will be the responsibility of the landlord.

Photographic Evidence

A further precautionary step to take would be photographic the entire interior and exterior of the property, prior to tenants moving in. Tenants would also be advised to photograph the interior and exterior upon move-in.

This will protect both parties involved;

As the landlord, you are protected from the tenants claiming that the inventory was incorrect and they did not cause any damage.

As a tenant, the same applies; the landlord would not be able to claim that an item was damaged by you if it was already damaged at the beginning of your tenancy.

Top Level Points to Include in an Inventory

In the list below, each point should be expanded so that the entire contents of the property are covered by the document:

• Structure, exterior and interior – The finish (painted, brickwork etc) and condition

• Windows and doors, including locks and number of keys

• Flooring. The type and condition

• Utilities – locations of the meters and their readings

• Smoke and carbon monoxide alarms

• Lighting – How many wall switches, bulbs & types, light shades etc

• Fixtures and fittings

• Bathroom – noting current condition. i.e. the tenant should ensure the bathroom is mould free at the end of the tenancy

• Furniture

• Appliances, including cooker, boiler and radiators

• Depending on the value, you may or may not want to include cutlery and other kitchenware in the inventory

• You could also include a rough estimation for repairs/replacements, however this is usually covered within the tenancy agreement.

Property Inventory Software

If you manage a large number of properties, it can be time consuming to manually write up individual inventories.

To ease the process of producing an inventory and having it signed, you can use specialized software, such as that offered by InventoryBase. Not only does this company offer software which manages all of your inventories, they also cover property inspections.

Inventory Template Checklist

If you only have a small number of properties to manage, we’d assume that you’ll sort the inventories yourself. However, if you require a helping hand in getting started writing up an inventory, there are numerous free templates online. Rocket Lawyer UK offer a service of creating a property inventory.

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Further reading

Simply business – Landlord inentory templates