As an industry, we are very vocal about being energy efficient and ensuring that we re-use, recycle and up-cycle at every opportunity to help minimise our impact on the environment.
This includes reducing the amount of paper we use which is why nearly every inventory provider / landlord / letting agent all uses an app, especially Inventory Base, to produce paperless reports.
However, during this time of austerity, there appears to be an emerging trend of recycling reports and pictures in favour of cost cutting. At best, this can be problematic, if when a dispute is raised, date/timed pictures and information are relied on during the adjudication process that do not match the start date of the tenancy.
At worst, it can lose the claim and could even create a wider case for more in-depth investigation into the tenancy process to find out exactly what else has been ‘optionally missed’ in favour of lowering costs.
Basis for property reports
At the start of a tenancy, in addition to the tenancy agreement, landlords are required by law to supply four documents:
- a copy of the government’s ‘How to Rent’ guide
- gas safety certificate
- information on the landlord’s chosen Deposit Protection Scheme, and
- an Energy Performance Certificate (EPC)
These obligations mainly benefit the tenants. Perhaps surprisingly, there are other documents which are not mandatory, even though they can provide both security and certainty for both parties.
One of these is, unsurprisingly, the inventory report
This document records the description of the contents and infrastructure as well as the condition of everything supplied (with the property) for the tenant’s use. At the end of the tenancy, it equally provides important, vital evidence for the apportionment of responsibility for any discrepancies, damage or missing items.
It is often appended to the tenancy agreement, giving it a semi-legal status, and both defines and limits the repairing obligations of the tenant. Normally prepared by an independent inventory clerk, it is a factual record of a property at the start of a tenancy.
Of the three main causes of deposit disputes, rent arrears is a relatively minor one. Much more common are disputes over damage and cleanliness. For the year 2021-22 they accounted for 46% and 50% respectively of all claims made using the TDS dispute service.
The fact that so many complaints reach a status that can be statistically measured suggests that even when an inventory report has been compiled and the contents agreed, there is still room for argument.
Tenants are often surprised by the claims made on their deposits by their landlords. Equally, landlords who believed their tenants’ repair liabilities to be clearly defined, face unexpected objections and even counter-claims.
Compiling a property report
The drafting of the report involves so much more than working through a quick-fire yes / no checklist. In some cases, it can be quite straightforward, especially for small, modern properties where there are no historic issues and where infrastructure and decor is replicated in each and every room.
But with older or larger properties with a tenanted history, there is always the potential that an issue will be misrepresented, damage inadequately assessed, poorly photographed or simply overlooked in favour of speed and cost.
Unfortunately, the inventory and all the other tenancy lifecycle reports (check in, interim and check out), are frequently treated as ‘nice to have’, often carried out by inexperienced staff without a thorough understanding of the need to be detailed or the understanding of how, if done properly, the inventory can minimise the risk to both the property, the landlord, agent and also the tenant.
Risk of recycling reports
One of the most obvious risks that can be a direct result of using old reports and their pictures is that any changes to the property since the last report was compiled are unlikely to reflect the property’s current description, condition and or issues.
This by default creates doubt – doubt in the validity of the information and doubt in the process of producing ‘an accurate report’.
That is all the deposit scheme needs to be able to dismiss the claim as the reports contents are then highly questionable and the balance of probability is therefore likely to be in the favour of the tenant.
Putting it another way, expressing the balance of probability in percentage terms:
*If the deposit adjudicator concludes that it is 50% likely that the landlord’s case is true, then they fail this test, but should the adjudicator conclude that it is 51% likely that the landlord is right then they will win the dispute.
Taking the short route
Whilst taking the ‘short route’ may reduce overheads (cost of attending the property, cost of compiling a report using a third party) landlords and agents are creating the ideal environment to have the claim thrown out before the adjudicator even sets eyes on the evidence.
The adverse effect this also has on the property is that any damage that has been caused by the out-going tenants are unlikely to be recovered leaving the landlord not only out of pocket but also reevaluating their use of any services used to compile the reports in the first place!
At Inventory Base, we work with landlords, letting agents and inventory providers, providing property management and reporting software that’s designed to help produce efficient and fully comprehensive schedules and reports.
Our experience has shown us how easy it can be to miss the early signs of disrepair and even the most glaring problems and the risk is increased if a property report and pictures are ‘recycled’ rather than being updated and new pictures taken at the actual point of a new tenancy being started.
A property inventory report is both vital and imperfect
It doesn’t 100% prevent deposit disputes, but if comprehensively compiled and evidenced, it does minimise the grounds on which disputes can be based, therefore reducing the risk for disagreements and provides powerful evidence to support the landlord’s position.
The temptation to reduce costs and time at the property may be strong but if the ‘saving’ is dwarfed by the losses suffered by a claim being thrown out, then as a landlord, you really need to way up the risks of recycling or investing in an accurate, professionally compiled inventory report.