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Why Interim Inspections And Updated Inventories Are Increasingly Important For Landlords

Jul 29th, 2011
by Simon.
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The recent news that England is moving away from being a nation of homeowners towards long term renters, with the majority of the younger generations stating they either through circumstances or choice have no intention to buy, is good news for landlords who are keen to expand their portfolios. Inevitably this will lead to longer term lets and with that, an increased importance of interim inspections and other inventory services.

Long-term lets are usually preferred by landlords and whilst time is spent negotiating rent increases and AST renewals during long-term lets, the matter of keeping inventories updated and performing interim inspections is often neglected. During the course of a longer tenancy, improvements may be made, various items replaced and without formally updating the inventory, there is no proof as to the standard of work carried out or, for example, the existence or condition of the replacement item. Tenants who know how to work the system could well take advantage of this when the tenancy comes to an end, and without proper evidence they may be able to get away with leaving the property closer to its original rather than improved condition, which will hit landlords in their pockets.

The best way of providing a supplement to the original inventory is to arrange for an independent inventory agent to visit the property during the course of the tenancy agreement (for example: immediately after any improvement works), and produce a new condition report of the relevant areas/items which includes video or at least photographic evidence. This should then be added as an addendum to the original inventory, and signed by both parties and utilised at the check out inspection as the base comparison document.

Conducting a check out inspection against an inventory that is two years old or more can be problematic if no updates have been made when they should have been. Ensuring that inventories are an accurate base for comparison is therefore very important, and will assist in a quick resolution to any issues and ensure the prompt return of the deposit to the rightful party.

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Are The Tenancy Deposit Boards Biased Towards Tenants?

Jul 27th, 2011
by Simon.
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Why The Legislation Was Introduced

According to the last Labour government, a significant number of landlords were abusing their position and holding on to deposit money that rightfully should have been returned to the tenant at the end of the tenancy.

To address the position, in 2007 they introduced the Tenancy Deposit Protection Scheme to protect tenant from the unethical landlords and letting agents who were unfairly withholding the return of deposit monies from the tenant.

The Tenancy Deposit Protection Scheme means that where property is let, the deposit must be controlled by an independent third party rather than the landlord/agent. That third party returns the deposit to the tenant at the end of the tenancy unless the Landlord can show that there are reasons to withhold repayment (e.g. for damages or cleaning).

The government awarded contracts to three companies to run the Tenancy Deposit Scheme, The Deposit Protection Service (The DPS),the Tenancy Deposit Solutions and The Tenancy Deposit Scheme (TDS).

Tenant Bias?

These bodies have developed a (somewhat unfair) reputation with landlords for being biased towards tenants. This has been further reinforced by the statistics released last year which show that 92% of cases have been found in favour of tenants and that landlords lost over £12M – and that’s just in the cases that actually went all the way to adjudication.

However, in defence of the deposit bodies, they are not biased in favour of the tenant. Their attitude is simply that the deposit money rightfully belongs to the tenant unless the landlord can prove that there is a justifiable reason for keeping it. To prove it the landlord must have strong evidence – and that means a thorough inventory detailing the property, its contents and their condition at the start of the tenancy and a comparative check out report at the end highlighting the differences in condition.

Good landlords have always conducted inventories on their properties – albeit fairly basic ones in most cases. But a simple checklist of contents is no longer sufficient. The burden of proof lies squarely with the landlord and the corroborative evidence must be watertight.

Without strong evidence clearly detailing the disparity and cleanliness or condition, the adjudicators will indeed find in favour of the tenant.

It is therefore essential for the landlord to have a professional (and independent) inventory backed up by visual evidence (“before and after” photographs) of the damaged/dirty item. However, the problem with photographs is that you need thousands of them to cover all the possible areas that might be damaged. It is for this reason we chose to use high definition video to support our inventories as a half hour video recording can amass evidence equivalent to tens of thousands of still photographs.

Of course landlords are being hit from all sides by charges, but when you consider (ignoring any serious damage that may be caused) even the cost of a professional clean will exceed £100…and the fact that you have no chance of claiming that money from the tenant without a proper inventory, a reasonably priced video inventory is something every prudent landlord should order each time he lets a property.

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From the horse’s mouth…

Feb 16th, 2011
by Simon.
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Extract from Cheshire East Council’s Private Landlord’s Newsletter:

Diane Cummings PSLO Macclesfield, recently asked Mr Glenn Warrington, a landlord who has properties both in Cheshire and High Peaks and is a member of the RLA, about his experience of pursuing tenants who left owing him money. He had the following advice to give and urged caution when employing a debt recovery agency.

Firstly he wanted to stipulate the importance of a good quality inventory and raised concerns over the difficulties landlords were facing when claiming through the Tenancy Deposit Schemes. Glenn understands that in cases where a tenant disputes the claim, the landlords are losing a high percentage of claims. He feels this might indicate that inventories are not sufficient to substantiate a claim and would urge landlords to provide as much evidence as possible.

Thank you Glenn!

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