The Importance of Inventories 1st May 2016
The Key Place newsletters frequently talk about the importance of inventories. This is because we want to give you the best possible chance to protect what is arguably your biggest investment. And yet, there are still landlords who do not want to shell out a relatively small amount, in order to protect their investment property. And so why are inventories so important today?
An inventory is a ‘detailed list of all things in a place`. It is a piece of documentation itemising property fixtures, fittings and furnishings, and making comment about their condition. This refers to external items as well as internal. The purpose of an inventory is to ensure that any damage done during the tenancy can be clearly identified, and as such offers a level of protection to both parties. In practice, inventories are essential in order to provide evidence regarding the condition of the property and its contents at the start of a tenancy. Without an inventory, it is very unlikely a landlord would be awarded money from the deposit scheme to cover damage, cleaning costs etc.
As tenants are not generally willing to pay money to cover cleaning costs, putting right damage, redecoration etc at the end of their tenancy, costs are almost inevitably recouped from the deposit. In some cases there is a straightforward process, whereby the landlord and/or letting agent identify the problem and agree an amount to be retained from the deposit with the tenant. However often there is disagreement between the landlord/agent and the tenant, and in these cases tenancy deposit schemes aim to resolve deposit disputes as efficiently as possible by going through an adjudication process, rather than having to go to court. If tenants know there is an inventory in place then they are less likely to dispute the deposit and more likely to agree to suggested deductions. Furthermore, more disputes are won if an inventory is in place.
New research (Tenant Deposit Scheme Annual Review 2015) has revealed that for the first time, since the introduction of the deposit scheme, more landlords and agents are being awarded 100% of the disputed amount at adjudications. In previous years tenants have been awarded the full deposit more often than landlords or agents. These results indicate that landlords and agents are presenting better documented evidence at adjudication, including a detailed inventory, and thorough check-in, check out and inspection reports.
The Tenancy Deposit Schemes (Scotland) Regulations were introduced in Scotland in March 2011, in order to safe guard tenants’ deposits from rogue landlords who frequently kept deposits at the end of a tenancy; and in order to protect landlords against non-payment of rent, or other costs at the end of a tenancy such as damage to the property, cleaning costs etc. For further information on Tenancy Deposit Schemes see accompanying newsletter article.
The Key Place lodges all deposits with SafeDeposits Scotland, which is the only not for profit scheme based in Scotland. The Key Place is very experienced at dealing with deposits and deposit disputes. We therefore know what standard of inventories SafeDeposits Scotland require, and what will and will not hold up in a dispute. The Key Place uses bespoke inventory software to provide detailed and accurate inventories embedded with photographs.
It is essential that landlords are able to fully evidence the state, condition and cleanliness of their property at the start and end of every tenancy. Landlords are putting themselves at risk of expensive repair bills if they do not have a water tight inventory, as it may not be possible to retain money from the deposit to cover any damage, cleaning etc. We would urge all landlords to agree to an inventory being carried out at their property at the start of every tenancy. It is essential that you safeguard your investment, and we are keen to do everything we can to help you.