Should Inventories Be Mandatory?

In the world of property management, ensuring effective asset management is vital for property owners, tenants and property managers alike. One key aspect of this management is the practice of maintaining accurate inventories. Inventories provide a comprehensive record of the condition and contents of a property, offering numerous benefits such as dispute resolution, financial accountability, and improved tenant satisfaction.

What is a property inventory?

A property inventory is a comprehensive record that documents the condition and contents of a property at a specific point in time. It serves as a crucial reference document for landlords, tenants, and property managers throughout the tenancy.

What should an inventory include?

It should include detailed descriptions, photographs and possibly videos of each room, as well as any fixtures, fittings, furniture, walls, doors and appliances within the property. The inventory captures both the interior and exterior condition of the property, highlighting any existing damages, wear and tear or cleanliness issues.

How does an inventory protect the landlord and tenant?

When used in combination with the checkout report, a schedule of condition and inventory report offers the landlord crucial evidence to substantiate the precise condition and contents of the property at the time the tenants commenced their tenancy. Without these essential documents, the landlord may encounter difficulties in providing evidence of theft or damages, thereby diminishing their chances of making a valid and successful deposit claim should the case be referred to an adjudicator.

Common Mistakes When Compiling a Report

One misconception is that creating a property inventory is a straightforward task that only involves a basic list of the property’s contents and condition. However, reports often suffer from the following mistakes:

  1. Insufficient Detail: Many reports are too basic and lack the necessary level of detail. They may have inadequate descriptions and condition comments, which hampers their effectiveness in accurately capturing the property’s condition.
  2. Opinion-Based Instead of Fact-Based: Reports should be based on factual information rather than subjective opinions. However, it is common for reports to rely on personal opinions or assumptions, which can undermine their credibility in the event of disputes.
  3. Incomplete Room/Component Listings: Reports often fail to list all the rooms or property components, omitting important areas that should be documented. This can lead to oversight and gaps in the inventory record.
  4. Lack of Visual Evidence: Many reports neglect to include photographic or video evidence to highlight cleaning issues, damages and maintenance problems. Visual documentation is crucial in providing a clear and objective record of the property’s condition.
  5. Absence of Cleanliness Schedule: A comprehensive report should include a cleanliness schedule or a schedule of conditions, specifying the expected level of cleanliness and the condition of various areas within the property.
  6. Failure to Involve the Tenant: It is important to provide the report to the tenant for their comments and signature. Neglecting this step undermines the transparency and collaborative nature of the inventory process.

A professional inventory and schedule must address these shortcomings. It should incorporate photo or video evidence accompanied by detailed descriptions, which often results in 40-page-long reports. However, the focus should not solely be on the report’s length but rather on the quality of information provided. The quality of the inventory becomes crucial when disputes arise, benefiting both the landlord and the tenant.

Moreover, the document should be able to withstand scrutiny in a court of law. In cases where landlords need to claim funds from the tenant’s deposit for repairs exceeding the deposit amount or unpaid rent, the inventory should be robust enough to serve as compelling evidence.
By avoiding these common mistakes and ensuring the production of a thorough and accurate report, landlords can enhance their chances of resolving disputes and safeguarding their interests in a rental agreement.

Where can landlords and property managers find a professional inventory provider?

Consider the following when searching for an inventory provider:

  • Insurance and Credentials:

It is important to choose an inventory clerk or professional inventory company that carries appropriate insurance coverage, such as Professional Indemnity and Public Liability insurance. You should request confirmation of these insurances. Additionally, if the company employs their own clerks, it is advisable to inquire about Employers’ Liability insurance as well.

  • Industry Memberships:

Some inventory providers may be members of professional organizations such as ARLA Propertymark Inventories or the AIIC (Association of Independent Inventory Clerks). While membership in these associations can be an indication of professionalism and adherence to industry standards, it is important to note that membership alone does not guarantee quality. You’d better not solely rely on membership but consider other factors as well.

  • Sample Reports:

Before booking an inventory report or service, it is highly recommended to request sample reports from the potential provider. This allows you to review the type of reports produced, assess the quality of information presented, and evaluate if the report aligns with their requirements and expectations. Sample reports give landlords an opportunity to gauge the professionalism and attention to detail of the inventory provider.

Is it necessary to have an inventory if a property is clean and tidy?

Regardless of the cleanliness, tidiness or even if a property is unfurnished with what one can perceive as low-value fittings or fixtures, having an inventory report remains essential.

For instance, let’s say your property has well-maintained walls painted in a consistent ivory shade at the start of the tenancy, and there are no apparent issues. Without a comprehensive inventory report, it would be challenging for a landlord to substantiate any deterioration such as heavy marks, holes, or inadequate redecoration in case the tenant fails to maintain the property properly.

Want Help with Organising an Inventory? Rentancy can help!

Among all our services, organising an inventory is one of the most popular. Our property management team is carefully choosing only the best and most reliable third-party partners on the market.

Here is what we do best:

Consulting:
  • Advice on setup and structuring of bookkeeping processes
  • Help resolve balances in existing accounts
  • A Balance scorecard of how well an agent is operating
Client Accounting Services:
  • Daily bank reconciliations
  • Rent collection
  • Process contractor payments
  • General accounts query handling
  • Process landlord payments
  • Producing and sending landlord statements
  • Manage property expenses & invoices
  • In-arrears chasing
  • Monthly KPI reporting
  • Revenue Assurance
Property Management:
  • Coordinating day-to-day maintenance
  • Keeping up to date with ongoing compliances – GSC, EICR, EPC
  • Arranging periodic inspections/inventories – carried out by 3rd party
  • Working on tenancy contracts renewals
  • Working on the end-of-tenancy contracts
  • General query handling
  • Legal notices
  • Deposit returns
  • Negotiate dilapidations
  • Right to Rent Checks

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