In our second blog of the series; Want to be a landlord? Defining your mid tenancy obligations we looked at the key reporting points during the tenancy namely the interim property visit and why Interim inspections are vital to a successful tenancy.
In our third blog of the series; Want to be a landlord? Post tenancy blues and how to avoid them we look at how to prepare for the end of the tenancy, offer some vital pointers and why not every tenancy has to end in a dispute.
How to prepare for the end of tenancy
Preparation is key to a smooth hand over for all parties so you really need to get all your ‘ducks in a row’ to ensure that nothing is missed and avoid any unnecessary delays or conflict points.
The first question to answer; is the tenancy ending naturally i.e the tenancy agreement is coming to an end on a date already agreed?
For clarity; a property is vacated by the tenants after surrendering the tenancy because they are:
- Leaving voluntarily at the end of a fixed-term
- You as the landlord or the tenant has given written notice to end the agreement
- Mutual agreement has been reached between you as the landlord and the tenant to end the tenancy; or
- Ending due to eviction by a court with a legal possession order in force
A key point to make here is that whatever the reason for the tenancy ending, the tenants are still legally obliged to continue to pay the rent as per the tenancy agreement up until the end date as either agreed or as enforced by a court of law.
Equally; your obligations for both the property and safety of the tenants remain in place until the tenancy end date so keep to any scheduled maintenance and agreed appointments for renewal of certificates. This will help ensure that any failure to meet your obligations are not used as a reason why a tenant refuses to move out at the last minute (it does happen) and or seeks compensation if the tenancy ends on bad terms.
Effective communication
From the very outset; you should have established agreed lines of communication as this helps to avoid confusion and ‘loss’ of information or instructions. And you should back this up by utilising the InventoryBase audit trail which will show when reports have been requested, compiled, shared, tenant comments added as well as picture uploads (if the option is enabled).
Remember to speak with your tenant; not at them! Treat tenants with the same level of respect and courtesy you would expect to receive from them.
The Inventory
It’s vital that the inventory report has been compiled and provides impartial evidence of the property including the following core components:
- Schedule of Condition / Cleanliness
- Meter Readings
- Smoke & Carbon Monoxide Alarms – both sited and tested for audible tone
- Keys – both in situ at the property and those handed over at check in
- Descriptions and conditions
- Safety certificates – Gas, Electrical (EICR), Legionella Risk Assessment, EPC
- Appliance manuals and instructions for heating, ovens, boilers etc
The report itself should be a comprehensive and detailed description of all the areas / buildings and communal areas the tenant is responsible for including contents, fixtures and fittings, décor, and all supplied appliances and or furniture.
The condition comments should highlight whether there are issues, damage as well the level of cleanliness at the start of the tenancy so that the tenant has a very clear understanding of their responsibilities and how to hand back the property (less fair, wear and tear) at the end of the tenancy.
Without a detailed report the checkout is likely to be inaccurate and potentially flawed and could be the one piece of evidence that loses you, as the landlord, lawful access to the deposit.
DIY reporting
As a landlord it is tempting to do your own report and to be fair; there is nothing that says the report either has to be compiled by a third party or that it should even be provided in the first place!
That said; without a detailed inventory you will struggle to provide the evidence needed to showcase a material change in either the fabric, condition or the items included in the property provided by you for your tenants use. All deposit schemes (Government or insured backed) will require you to prove that you have legal right to request deductions from the deposit so evidence will be key to a dispute if it arises
Doing the report yourself will require you to be impartial and provide all the evidence the adjudicator may need such as:
- Detailed descriptions and condition comments
- Date and timed pictures and or video or the property, appliances, flooring, kitchen units, sanitaryware etc
- Testing of smoke detectors and carbon monoxide (where applicable)
- All keys provided – both in property and at check in
- Appliance manuals and instructions such as for heating, ovens, appliances etc
You will also need to compile and share the report with the tenant so think about how you will do this i.e word document, PDF or using an app?
There is a lot to think about and with all the other tasks to complete; cleaning, decoration, maintenance, safety certificates. So ask yourself; is compiling an inventory report within your skill set, do you have the time, will it be impartial and more importantly will it protect your property / asset?
Service providers
Outsourcing to a third party inventory company or via Workstreams makes a lot of sense on many levels as the inventory provider is likely to be very experienced, insured and will be able to pick up on issues that you may overlook as you are too familiar with your home.
An experienced clerk takes a very practical, impartial and dispassionate view of the property as they have no vested interest other than to provide a quality report. So ask yourself; is it a cost effective use of your time and will it protect or hinder ?
Don’t forget the pre checkout
Get yourself ready and contact the tenant at least 2 weeks before the end of tenancy date to talk through any outstanding maintenance issues or concerns and to gain an understanding of any other issues that they want to raise so that you both have the time to rectify and or plan for maintenance once the tenants have vacated the property.
Provide the original inventory so that the tenants can familiarise themselves with the contents of the report and understand the condition of the property at check in including what you have set out as acceptable standards of cleanliness at check out.
It’s easy to forget what the property was like especially when tenants are busy moving. Providing the check in report or inventory enables the tenant to plan for cleaning of the property, repairs they may need to make, any items to be removed and or replaced like faulty or missing bulbs, smoke alarm batteries and also general garden maintenance.
If compiled by an inventory professional or clerk; the inventory report would have captured the property and all its components including level of cleanliness and any issues that were pre existing. This will help you both to pre-agree any dilapidations and charges against the deposit if needed and helps the tenant to prepare for the last day of tenancy.
The point to note here is that all properties should be returned in a similar condition and level of cleanliness as seen at the start for the tenancy less fair, wear and tear.
Advise the tenant that any furniture or items shown with the report are to be returned to their original location to assist the check out and help ensure that the tenant is not held liable for items of property not seen because it or they have been squirreled away somewhere such as the loft or in a sealed box or containers. This is a common occurrence!
Abandonment of the property
This is becoming a much more common occurrence. Very simply put; tenant abandonment is when a tenant leaves the property before the term of tenancy has ended without formally informing the letting agent and or you as the landlord.
It is a growing problem for landlords but to be clear; whatever your thoughts and feelings are on the matter; the tenant still retains a legal tenancy and has the right to return and demand to take up residence at any time, even if they have defaulted on their rental payments.
If the tenant leaves before the tenancy has officially concluded and left any possessions there are specific procedures to be followed:
According to Shoosmiths version of Torts (interference with Goods Act 1977) – if covered by a clause in the Tenancy Agreement;
- The tenant should be notified and given a chance to reclaim their possessions including a time frame for them to recover their possessions
- The items should be held for the specified time then disposed of but with an obligation to sell at a reasonable price with net proceeds returned to the tenant
If NOT covered by the Tenancy Agreement;
- Tenant should be notified and given the chance to reclaim the items
- Goods should be kept for 3 months then disposed of and/or sold
- Any net proceeds should be kept for six years if you are unable to return to the tenant
What you should remember as the tenancy comes to an end?
Although not exhaustive the following pointers will apply although each tenancy can differ.
Remember to start planning for the check out at the mid term inspection point
Don’t forget to give notice and agree the end of tenancy date
Remember to provide the tenant with the original inventory so they know the condition / level of cleanliness expected
Don’t forget to arrange for all keys to be returned and more importantly where and who to!
Remember to ask for a forwarding address for final utility bills, deposit return or if going to dispute and redirection of any post
Don’t forget to advise the deposit scheme for the return of the deposit (less any agreed deductions)
Remember to make arrangements for maintenance work to be carried out and plan for any certificates (Gas Safety / EICR) that are going to be due and certainly before the next tenancy commences
Returning the deposit
All in scope tenancies are now subject to the Tenant Fee Ban so you should familiarise with the requirements. You can find details on our InventoryBase blog here.
If a deposit was taken at the start of the tenancy the scheme that has either held the monies or has overseen the safe retention under a non custodial policy should be advised in order to ‘release’ the deposit within 10 days of the end of tenancy.
If any aspect of the deposit is in dispute this should be communicated to the relevant scheme or insurance backed provider as soon as possible so that they can commence the arbitration process if agreement cannot be reached.
It is always in everyone’s best interests to reach an agreement to avoid any delay in returning the deposit. By being reasonable (on both sides) it will ensure that you do not end up in a protracted and potentially costly process if the matter is in fact relatively simple to agree. This is why establishing a line of communication very early on in both the tenancy and in the pre check out process is key to ending the tenancy successfully.
To avoid costly mistakes and issues; prepare and plan
Plan the tenancy and engage professionals when carrying out any type of work, required safety certificates or report.
Prepare your property for the tenancy as it will protect your investment and avoid those post tenancy blues.
Not every tenancy has to end in dispute
As an experienced inventory clerk, a former landlord and now a current tenant I know from personal experience that most tenancies end without dispute but equally acknowledge that this isn’t always the case.
If experience tells us anything it is that we need to learn from our mistakes so the key to avoiding making them in the first place is to ensure you plan the whole of the tenancy process from listing the property for rent right through to the end when your tenants vacate..
Remember: don’t leave everything to the last minute.
Rushing and making last minute plans or decisions can lead to mistakes and also missed opportunities that may come back to haunt you. And don’t expect the tenant to know what the acceptable standards of cleanliness you want to see at check out; inform them at the check in stage and again before the check out and make sure they are aware of their obligations by providing a copy of the inventory report.
A happy tenant is a happy landlord.
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