Landlords in the UK are out of pocket to the tune of over £5 billion every year, simply because of damage to property and unpaid rent. Rent arrears account for around £900 million in costs annually, while damage to landlords’ property costs them an incredible £4.5 billion. (Source: Access Legal Survey, 2015).
The research also reveals that broken appliances are one of the biggest problems. Damage to carpets and decorating is also prevalent, while cigarette burns remain an issue – despite many rental properties not allowing smoking inside. Over a third of landlords surveyed also stated lack of cleanliness as a common concern.
According to the latest TDS statistics, property damage is the second most common cause of disputes (52 per cent). Historically, many tenant disputes have gone in favour of tenants, as there was simply not enough evidence to support the landlord’s or agent’s damage claim and many landlords and agents feel tenants are not held to account when damage is caused – and there is little they can do to protect their property.
PREVENTION IS BETTER THAN CURE
So, how can landlords and agents protect themselves from costly damage? Firstly, it is so important to carry out background checks on potential tenants.
Picking the right tenant can save a long, costly eviction process further down the line. Be thorough in conducting background checks and reference gathering, including bank statements for the past three months, previous landlord and agent references to check the tenant paid rent on time and credit checks, incorporating fraud indicators and employer references. Check identity and proof of current address – ideally tax or insurance documents – and talk at length to a prospective tenant.
It’s a simple way to protect landlords from massive damage bills and disputes. It’s called an inventory.
Secondly, make regular interval inspections (at least every three months) to record the condition of the property and arrange repairs for damage or wear and tear as soon as possible. Visits should be arranged for a convenient time for the tenants and you should give at least 24 hours’ notice; however, entry can be made without notice for emergency repairs (e.g. flooding).
You should ensure that the lease agreement also gives you a reasonable right of access to inspect the property and provide any agreed services (e.g. cleaning or gardening).
Finally, protect yourself properly from the very start, during and at the end of a tenancy agreement, by ensuring that there is a professional inventory, check-in and check-out.
The best way for landlords and agents to protect their property and avoid a dispute is by ensuring that the condition of the property is fully recorded at the start of the tenancy, with a comprehensive inventory and thorough check-in and check-out reports.
WHAT TO LOOK OUT FOR
The most important focus of a check-out is to make sure the property has been left in the same condition that it was in when the tenant moved in, allowing for reasonable wear and tear. The inventory must be fully detailed and supported by photographs where necessary. A check-out is very much reliant on an efficient check-in process. Without an inventory, a landlord or agent is unlikely to be able to deduct any money from a deposit, as there is no proof as to the condition the property at the beginning of the tenancy.
The most common mistake in inventories is the lack of detail. Often there are not enough appropriate photographs with accompanying description to show the condition of the property and its contents. Many landlords and agents fail to record the condition of sinks and bathroom fittings, skirting, doors, floor coverings and kitchen units. If an inventory is not a professional and thorough report, it is not worth the paper it is written on.
Inventory reports should note detail on every aspect of damage and its location at the start of a tenancy. Good photographs provide vital evidence and should be high quality printed on A4 or A3 size paper, making any damage clearly visible.
Unless landlords and agents have a watertight inventory, they risk disputes and expensive repair bills.
Our research shows that landlords and agents who have switched from analogue to digital inventories have seen their tenant deposit disputes drop by more than 300 per cent and their success rate at adjudications improve by an average of 75 per cent.
Normal wear and tear is a fact of life with rental properties, just as it would be at home; but if you’d like to avoid the hassle of disputes and damages, prepare a thorough inventory of the condition of the property that details the condition of every item within. www.imfuna.con/let-uk