Success Institute Agent

What is an inventory?
The inventory is a catalogue of the property and its’ contents. A schedule of condition is a record of condition. Most commonly the two are combined into one report and are called either the inventory or schedule of condition.

The inventory/schedule of condition has several functions:

* it is a catalogue of the property being let

* it records the condition of the property and any items that are included in the tenancy

* it forms part of the legally binding contract that is set out in the tenancy agreement between the tenant and the landlord.

Why it’s important to prepare one?

For years when it comes to inventories, landlords have got away with scribbling a few notes on a bit of paper about the condition of their property. The general principle being that accurate records were not needed. This was because as a landlord you were both ‘judge and jury’ and if and what part of the deposit was withheld to cover the costs of repair and cleaning. This is not to say that tenants had no remedies if they felt aggrieved with the decision. Under the pre April 6 2007 system they were able to take the landlord to court if they thought that they were unreasonably withholding their deposit. The judge would then decide on the merits of their claim. However, the ‘hassle’ and inconvenience to the tenant of carrying this through meant that in most cases tenants do not take matters any further, especially where the sums involved were small.

Things will never be the same again

The Tenancy Deposit Scheme (TDS) will change this cosy amateur approach in several important ways:

1. No longer will the landlord have the benefit of controlling the monies from the outset

2. Because of point 1 many tenants are likely to feel emboldened to take on the landlord if they think they even have a chance of winning the argument. There is likely to be a large jump in the number of cases where the tenant disputes the withholding of all or part of their deposit

3. The inventory will become far more important for many landlords as it is the key document in proving the condition of the property before a tenant moved in

4. The way of assessing disputes will now change. Rather than matters being resolved through the courts, most will be decided by independent arbitrators. Arbitration is generally seen as less adversarial and fixed by legal procedure than the courts and this is likely to result in outcomes that differ from those that occur currently.

Message to landlords

The message to landlords is clear. No longer will they be ‘judge and jury’. The result is that the number of contested deposits is likely to increase dramatically. Therefore it is more important than ever to have a carefully prepared inventory at ‘check in’ and that at ‘check out’ an accurate record of the properties condition is made. Otherwise they could end up significantly out of pocket. Landlords should look out for the TDS compliant inventory coming soon to the registered users of http://www.propertyhawk.co.uk

Landlords however do have an option not to prepare the inventory themselves.

There are two ways of avoiding the preparation process.

Firstly, if the property is fully managed by an agent then inventory taking and the subsequent ‘check out’ should be carried out by them as one of their management duties. This obviously will save you time. It will also mean that if there are problems with the condition or cleanliness of the property; the agent should rectify these and use the deposit monies to cover this expense before handing the balance back to the tenant.

The second way to get around having to prepare an inventory is to employ a specialist Inventory Clerk. These individuals carry out the whole process for you; they can also do the mid tenancy inspection as well as the final ‘check out’. The downside to this service is that it is not cheap. The costs of a check in and check out run to about