What is an inventory?
Whenever you are granting a tenancy on your let property, you hope and expect that the tenants who are moving in treat the place with the care and respect it deserves – that they do nothing to damage the property on purpose and are prepared to recompense you for any accidental damage.
With that in mind, it is both yours and the tenants’ interests to establish a baseline describing the condition of the property and its contents from the moment they move in. It gives the tenant the reassurance that they are not going to end up paying unfairly for pre-existing damage for which they are not responsible; it gives you a clear picture of the condition in which you are entitled to find the property when the tenancy ends.
This snapshot of the condition of the property and its contents when tenants move in is called an inventory – it is checked and agreed by you and your tenants when they move in and once again when they move out (although you might want to conduct interim checks during the course of a medium to long-term tenancy).
It is also common practice for the landlord to collect a deposit from the tenant at the beginning of the tenancy as security for payment of any damage that may be caused, with the remainder available for return to the tenant at the end of the tenancy.
Tenancy deposit protection scheme
For any assured shorthold tenancy (probably the most common form of contract) that began after the 6th of April 2007, the law now requires that any deposit you collect from your tenant must be registered for your mutual protection by a recognised third party.
If the tenant has caused no damage to the property, has kept to all the terms and conditions of his or her tenancy and has not defaulted on the payment of rent, the tenant is entitled to have the full deposit returned.
The Residential Landlords’ Association (RLA) points out that the tenancy deposit protection scheme does not insist that an inventory is compiled, checked and agreed by you and your tenant, but clearly underlines the importance of conducting one – for the avoidance of any doubt or dispute about what damage has been caused by the tenant and what was pre-existing.
The RLA also refers to decisions made by arbitrators when there has been a dispute between landlord and tenant about damage caused that the landlord is unable to deduct or recover any proportion of the deposit unless an inventory was compiled, checked and agreed at the start of the tenancy.
How to compile an inventory
Having established the importance of conducting an inventory, how do you go about compiling one?
- ordered: clarity is improved if it is carefully ordered in a logical way, with the structural and decorative condition of each room and the condition of its contents, for example;
- comprehensive: the more detailed and more comprehensive your inventory the less room there is for any subsequent doubt or dispute;
- accurate: descriptions are accurate enough for anyone else to understand and agree on the condition of the property at the time (the use of photographs may help to achieve this); and
- comprehensible: it needs to be written and describe the property in a way that is easy to understand – even by those who may not have a perfect command of English, for example.
Precisely how your inventory achieves these objectives is of course entirely up to you as the landlord. There are a number of freely available templates to which you may want to refer, including one written by the housing charity Shelter.