Property inventory & inspection - a guide for landlords

How to create a property inventory and carry out a landlord’s inspection

Paul Shamplina, the founder of Landlord Action, explains what landlords need to know about drawing up a property inventory and the ins and outs of an inspection.

This video is a guide to what landlords need to include in their inventories. Or read on about inventories and what you need to know about carrying out a property inspection.

You can also learn more about our specialist landlord insurance here.

It’s a very detailed document that also makes note of the condition of every item stated and is often supported by digital photographs.

The introduction of mandatory deposit protection schemes now mean inventory management and schedule of condition reports have become the most important documents required at the start of a tenancy – besides from the tenancy agreement.

If a landlord takes a deposit from their tenant (nearly all landlords and agents do), then by law the landlord must protect it in one of the government approved schemes. If a landlord is unfortunate enough to find damage to their property, poor cleanliness, missing items, strong odours or anything that is not how the property was originally rented (subject to fair wear and tear), then they will want to claim against the deposit to compensate.

The inventory and schedule of condition, along with a check-out report, is a landlord’s evidence of the exact contents and condition of the property when the tenant moves in. 

Without it, a landlord cannot prove that any subsequent damage or theft was down to the tenant and does not stand a chance of securing a claim when it goes to an adjudicator.

Are a property checklist and inventory the same thing?

There are many different checklists available to landlords on the internet which provide guidance to renting out property and some may refer to an inventory as a checklist.

Essential the property inventory is a comprehensive document designed to keep track of all fixtures, fittings and furniture inside a rental property and their condition.

How to create a property inventory

There is a common misconception that carrying out an inventory is a simple procedure – simply list the contents and state the décor, noting any marks or damage.

But in truth, it isn’t that straightforward.  A proper inventory (and schedule of condition) should contain both detailed descriptions and photographs and can easily run to 40 or 50 pages. If a landlord wants to be sure they can claim from a tenant’s deposit for damage, the inventory needs to be able to stand up in court.

Inventory management reports should include:

• inventory (listing every item) and schedule of condition (detailing its condition)
• check-in (agreement of the inventory by the tenant)
• periodic visits (checking the tenant is meeting the tenancy agreement obligations)
• check-out and dilapidation reports (report that determines change, damage, cleanliness, missing items, maintenance or general wear and tear).

The government deposit schemes, who adjudicate against loss caused at the end of a tenancy, recommend landlords have these types of evidence.

• A robust tenancy agreement in place that refers to the inventory
• Clear, detailed and professional inventory and schedule of condition
• Tenant’s signature on the check-in inventory
• A comprehensive check-out report
• Proof of an impartial check-in and check-out process and audit trail
• Reports provided in text format with photos and/or video footage as supporting evidence
• Records of receipts, invoices, estimates, quotes and cleaning charges
• Records of all communication

In addition, both the main inventory bodies, the AIIC and APIP, highly recommend landlords or their inventory clerk/company carry out these steps.

• Outline the legal requirements of the tenant within the body of the report
• Outline definitions of types of clean and condition
• Detail all areas the tenant is responsible for, including outbuildings, garage and loft areas
• Reference condition of items clearly (including size, location and description)
• Include brand names and model numbers of appliances
• Go through the inventory with the tenant and amend any areas that need clarification

What would an inventory for unfurnished property include?

Some people think you only need an inventory report for furnished properties or ones with high value fixtures and fittings. But that isn’t the case.

For example, if a property starts off magnolia throughout, but a tenant then paints every wall a different colour, without an inventory a landlord has no proof of the original colour of the walls.

Below are some further examples.

• Flooring, be it carpet or wood, can become stained or damaged
• Windows and doors can also be damaged
• Without regular cleaning, bathrooms and kitchens can be subject to mould and lime-scale build-up

An inventory is often the only document landlords have at their disposal when it comes to withholding money from the deposit for replacements, repairs and cleaning.

Is there a free landlord inventory template I can download?

If a landlord is confident he/she can carry out the inventory themselves, ‘off the shelf’ inventory packages, in both hard copy and digital format are available.

Are there property inventory services or software I can use as a landlord?

Inventory software is now much more sophisticated and enables users to upload images, notes and videos as the report is being created.

Most software is aimed at letting agents and inventory clerks that use the application on a regular basis.  This means there is generally a set up charge (between £100-£200, for example) and then a usage fee per inventory, for mid-term checks and for check-out services.  Most letting agents will be able to provide a professional inventory service 

Otherwise, landlords can save themselves a great deal of time and hassle by outsourcing the process to an independent specialist. They can provide professional expertise and advice. Plus, landlords have the added protection of the work being carried out by someone completely impartial, which can be very important if there is a deposit dispute at the end of the tenancy.

Landlords should choose a company or individual who is a member of a scheme under which they have to abide by a code of practice. The two main organisations are the Association of Independent Inventory Clerks (theaiic.co.uk) and The Association of Professional Inventory Providers (apip.org.uk).

One company I highly recommend is No Letting Go.

Inventories can cost anywhere from £60 to several hundred pounds, depending on the size of the property, furnishings and location. Check-outs cost a little less but overall the cost is easily outweighed by the savings and benefits.

Inventory summary

Accurate and detailed paperwork at the start will not only save landlords lots of potential headaches when the tenant leaves, but will also send a clear message to the tenant from the outset of what is expected of them.

As well as being used in case of a dispute, a successful inventory can also help landlords avoid a dispute in the first place. For example, if their tenant is disputing paying for damage at any point and a landlord has a signed inventory, evidence can be provided right away and this is often enough to prevent the case going further.

This is one part of the lettings process that landlords simply cannot afford to ignore.

Landlord Rented Property Inspections

What are my house inspection rights as a landlord?

Legally, when a landlord grants a tenancy, they give the tenant exclusive possession, subject to any rights of entry the landlord reserves. Entry without the tenant's permission, unless the landlord has the right to do so, is a trespass and the tenant could take action to claim damages.

Access can be permitted in one of two ways, either by a provision in the tenancy agreement or if the law confers a right of access.

Under Section 11 of the Landlord & Tenant Act, landlords or people authorised by them, have the right to view the condition and state of repair of their property. They can also carry out necessary repair works. In both instance they must give the tenant 24 hours’ notice (in writing and at a reasonable time of day).

If a tenant refuses to allow the landlord access to carry out the repairs then they: 

• reduce their entitlement to claim for damages for disrepair or for personal injury caused by the disrepair
• expose themselves to a potential claim for loss suffered by the landlord as a consequence of the landlord being unable to prevent further deterioration or damage to the property. This may result in monies being deducted from the deposit.

Do I need to give the tenant notice of a property inspection?

A property visit is the opportunity for a landlord or a representative to check that the property is being looked after to the agreed levels and that certain requirements are being met.

There are a number of do's and don'ts to follow and there are strict laws as to when and how landlords can enter a property. A property visit by a professional company can save landlords time, aggravation and money if problems are highlighted and dealt with early.

Here’s what needs to be considered.

• The inspection must be conducted at “reasonable times of the day”
• The landlord/agent must give 24 hours written notice
• If someone other than the landlord or agent is going to do the inspection, then that person should be authorised in writing

Sending an inspection notice letter to residents

It's a good idea for landlords to carry out routine visits to their rental property to keep an eye on their investment and to give tenants the opportunity to see landlords taking an interest. They are far more likely to take care of the property if the landlord demonstrates a certain level of responsibility.

Landlords should send a written letter by post (tracked with proof of postage).  It’s also be a good idea to follow this up with an email or text message, just so a tenant can’t claim the letter was lost in the post.

Some tenancy agreements also set out dates when a landlord or agent will:

• inspect the property
• have a right to enter (for example) to carry out the annual gas safety check
• or set out provisions for landlords to show prospective tenants round in the last month of tenancy (upon giving written notice).

How often can a landlord do an inspection?

Landlord inspections are typically conducted every quarter, but often reduced to every six months after frequent positive inspections to the same property/tenants.

While it’s important to make regular inspections, it’s equally as important not to make too many, such as every month, as this could be deemed as harassment. In most cases, there should be no need to visit the property more frequently unless there are genuine repairs and maintenance issues that need attention.

Also carrying out an inspection one month before tenants are due to depart is useful as it allows landlords the opportunity to identify any issues that may occur at check-out. Highlighting them in advance gives tenants the chance to address any issues they may be responsible for, which then reduces the potential for dispute and/or delay new tenants moving in.

This also provides landlords a chance to remind tenants of their contractual obligations, such as  returning keys, making sure final bills are paid and any possible charges or deductions to the deposit.

What can I reasonably do during an inspection?

Once a tenant has been in a property for at least three months it’s wise to carry out a mid-term inspection.

This gives landlords a fair idea of how tenants are treating the property and whether any suggestions need to be made to them, or if there are any maintenance issues that need to be carried out by the landlord.  Minor maintenance jobs (fixing a door handle, light switch etc.) may be carried out there and then to avoid them escalating into major repairs.  However, if the job is going to take a long time, it’s advised to liaise with tenants over a convenient time to return.

As well as assessing tenants’ living conditions and ensuring there are no immediate causes for concern (illegal activity), it’s a great opportunity to assess whether a landlord is likely to want to extend the tenancy and a chance to build a relationship with the tenant. Not enough landlords value this but they should because it can be the key to a profitable and stress-free tenancy.

Can I take photos during an inspection?

With the new protection from eviction legislation (Retaliatory Eviction) passed last year as part of The Deregulation Act, it’s more important than ever to establish the condition of the property at regular intervals.

However, landlords must maintain tenants’ absolute right to “quiet enjoyment”. This is a fundamental right of tenants which means that they are entitled to be left to live in the property without interference or unnecessary intrusion.

A landlord would be within their right to take photographic evidence if upon inspection a landlord finds:

• signs of unauthorised occupiers or pets
• unauthorised decorating and painting
• insufficient cleaning and a build-up of refuse which may lead to vermin infestations. 

Mid-term checks aren’t only to benefit the landlord and ensure the property is being well looked after. They are also for the safety of tenants, and landlords should clarify this with tenants.

How do I follow up with a house inspection report?

Whether a landlord or their letting agent do the mid-term, they should inspect throughout and make a written reference to any differences between the inventory report which was compiled at the start of the tenancy and the current condition. 

This house inspection lists all specific and relevant details with regard to the cleanliness and general condition of the property, including any items that are either missing, broken or damaged. Any discrepancies can then be flagged with the tenants.

What if the property is not in good condition?

If there is damage, poor cleanliness, missing or broken items, this is an opportunity for the landlord to contact the tenant and advise them of any appropriate action that should be taken to rectify any issues.

The landlord can also ‘make good’ any damages relating to the general use of the property to keep the property in good condition, which most tenants welcome as it demonstrates a duty of care. 

What is reasonable to ask for after a home inspection?

A common dilemma with inspections is that there can be a very fine line between ‘fair wear and tear’ and ‘damage’. There has to be a certain level of leniency from a landlord’s perspective.

Damage caused deliberately or by carelessness should be brought to a tenant’s attention giving them the opportunity to rectify it.

Most tenants are more than happy to accommodate inspections. As such, it’s also an opportunity for them to bring areas of concern to a landlord’s attention. However, my advice is that landlords should remember their property is another person’s home so it should be done with courtesy and make sure it’s convenient for all parties.

If a landlord requests a tenant addresses issues with the property, a re-inspection can be carried out to ensure the tenant has complied with the landlord’s instructions.

End of tenancy final inspection

An end of tenancy final inspection is known as the check-out. This is the critical final report, prepared at the property on the last day of the tenancy that helps determine whether costs need to be recovered from the deposit.

A check-out is used in conjunction with the inventory, schedule of condition and check-in report. The inventory company or letting agent will then make recommendations to the landlord as to whether the changes are down to fair wear and tear, tenant liability or landlord maintenance.

Inventory clerks work on facts alone and register change, which is why it’s so beneficial to use an external company who can provide an impartial third party review. 

As they aren’t privy to all the information from the tenancy, the landlord or agent will determine and agree the costs to be awarded to the landlord and tenant. If an agreement cannot be reached with the outcome they have the right to take the case to arbitration.

Landlord or letting agents should give tenants two weeks’ notice of the date of the check-out inventory to give tenants the opportunity to be present. This gives both parties a chance to talk through any issues which often helps avoid a formal dispute occurring.

Inspection summary

Routine inspections are an extremely important part of managing a rental property. They are the only way landlords can adequately assess the condition of their property.

For landlords managing property themselves, often the routine inspections don’t happen as often as they should (or not as thoroughly), due to feeling uncomfortable about going into their tenant’s home. If this is the case, my advice is to instruct a managing agent or inventory company to carry out these checks.

Keeping a well maintained property not only appeals to prospective tenants, it often rents more quickly, attracts better quality tenants and help achieve maximum rent.

Paul Shamplina Video Landlord Insurance Rental Road

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Paul Shamplina
Last Updated: 27th Feb 2019