Deposits and you
Deposits are necessary, but take a few precautions
Deposit legislation is very complex and it can always end up with the landlord losing out.
Remember, even if you use an agent, the landlord is ultimately responsible. Ensure you check your terms and condition with your agent and that you trust your agent.
Importance of a Property Inventory for Landlords
An inventory is one of the most crucial documents a landlord can have. It provides a detailed list of a property’s fixtures, fittings, and features while recording their condition at the beginning of a tenancy, supported by photographic evidence.
To safeguard your property and minimize disputes over deposits, follow this guide on inventories and how to avoid conflicts.
When Should Landlords Create an Inventory?
An inventory should be prepared before tenants move in. During check-in, tenants should review the inventory and note any changes.
Throughout the tenancy, conduct periodic inspections to track any damage that isn’t recorded in the inventory. At check-out, compare the property’s condition to the original report to determine if any deductions should be made from the deposit.
How Inventories Help in Disputes
Without an inventory, you may lack crucial evidence for deposit disputes. A detailed inventory can be instrumental in the adjudication process, making resolution easier and faster.
A smooth check-out process can reduce the time between tenants, ensuring minimal loss of rental income. Additionally, some landlord insurance policies may require an inventory, and failure to have one could breach policy terms.
Creating an Effective Inventory
A professional and unbiased inventory should detail the quality and condition of the property, including décor, fixtures, and fittings, for both the interior and exterior.
The inventory’s length depends on whether the property is furnished or unfurnished. However, even unfurnished properties require a comprehensive inventory, as it should document not just items but also the condition of walls, floors, and fittings.
Since cleaning is a common cause of deposit disputes, including photographs is essential. The report should also document meter serial numbers and have a signed declaration page for both parties.
The Check-In Process
Check-in is a crucial stage where accidental damage can occur. Tenants should review, agree upon, and sign the inventory before moving in, making amendments if necessary. Both parties should acknowledge any changes and verify photographic evidence.
Ideally, the landlord or agent should go through the tenancy agreement and inventory with the tenant before handing over the keys. Ensuring mutual agreement on the document reduces disputes later. Many deposit claims are rejected simply because the tenant didn’t sign the inventory.
Additionally, landlords must place the tenant’s deposit in a government-approved protection scheme within 30 days of receiving it. Failure to do so can impact your ability to claim deductions.
The Importance of Routine Inspections
Regular inspections help ensure the property is maintained and that tenants comply with the lease. Inspections can also identify necessary maintenance work.
It’s advisable to document any issues found during these inspections, as this evidence may be useful in future disputes. Landlords should aim to inspect the property every three to six months, providing at least 24 hours’ notice and obtaining the tenant’s permission.
The Check-Out Process
At check-out, the property should be thoroughly inspected against the initial inventory report. Tenants should be reminded in advance of how they need to leave the property to receive their full deposit back.
During the final inspection, consider the following:
- Is the property clean?
- Is there damage beyond normal wear and tear?
- Are any provided items missing?
- Is the garden well-maintained (if applicable)?
- Has the tenant left any belongings that require removal?
- Have all keys, including window keys, been returned?
- Have final meter readings been taken to confirm outstanding bills?
After the inspection, compile a clear report with photographs documenting any changes.
What Happens After Check-Out?
If deductions need to be made, landlords must notify tenants within 10 working days, providing a written explanation.
If a dispute arises, attempts should be made to resolve it before involving the deposit protection scheme. If no agreement is reached, the scheme will step in to adjudicate.
Acceptable Deductions from a Deposit
While landlords should expect general wear and tear, deductions can be made for avoidable damage. Potential reasons for deductions include:
- Cleaning
- Damage
- Redecoration
- Missing items
- Gardening neglect
- Unpaid rent
- Unsettled utility bills
The Adjudication Process
If a deposit dispute is escalated, adjudicators will make a decision based solely on evidence provided. This includes the tenancy agreement, inventory, check-in and check-out reports, and any interim inspection records.
To support claims, landlords should provide receipts or estimates for repair work.
Since the deposit remains the tenant’s money, landlords must offer sufficient proof of damage or breaches to justify deductions. The deposit protection scheme aims to resolve disputes within 30 days, and the adjudicator’s decision is final and binding.
Recommendations from Deposit Protection Schemes
Government-approved deposit protection schemes advise that inventories be professionally compiled and favor the use of independent inventory firms.
Best practices include:
- Always including photographs in reports.
- Conducting check-ins and check-outs with tenants present.
- Keeping inventories unbiased and high quality to avoid disputes.
- Carrying out regular property inspections.
- Ensuring tenants understand their rights.
Maintaining a detailed, up-to-date inventory is key to preventing disputes and ensuring a smooth end-of-tenancy process for both landlords and tenants.
Remember, London Online have been successfully navigating deposits and claims. We are accredited agents who can take care of this for you as part of our inclusive packages.
