The new, higher threshold for Assured Shorthold Tenancies which came into force on 1 October 2010 means that properties with rents up to £100,000 per year must now be protected by one or other of the Tenancy Deposit Schemes.

This has brought an even closer focus on the importance of the inventory, its quality and its timeliness. A property with a rental value of £2000 per week has the potential to create huge costs in repair and replacement at the end of a tenancy; whether those costs will be met by the landlord or the tenant can often depend on the rather vague term ‘fair wear and tear’.

There is a very fine line between what can be happily termed ‘fair wear and tear’ and what constitutes ‘damage’. The Dispute Service website details countless case studies relating to disputes between landlords and tenants on this very subject; it is quite evident that there is plenty of scope for landlords and tenants to be treated far from fairly if good practice is not followed. A meticulous and consistent approach to check-ins, check-outs, inventories and interim visits should be an absolute priority for landlord and letting agents. Correctly undertaken, these will deliver the vital foundation for a successful and uncontested tenancy by providing all the necessary supporting documentation to avoid any dispute between the landlord and tenant in discussions about the condition of the property and its contents.

An independent inventory management company is almost certainly betterequipped to provide an unbiased assessment of a property throughout the period of the tenancy. Tenants are likely to respond better to someone that is not linked to the landlord in any way and whose judgement is not clouded by any existing or historic business relationship. Extensive experience of the business which includes an in-depth understanding of the potential pitfalls associated with the ‘fair wear and tear’ debate will also pay dividends – protecting both the landlord’s property investment and reducing the risk of unscrupulous claims affecting the safe return of the tenant’s deposit.

Whoever is responsible for determining fair wear and tear, it is essential that the landlord is appreciative of the need to make allowances for depreciation – whilst accepting that he or she cannot use the tenancy as a means of ‘betterment’ ie seeking out replacement of damaged or missing items with new ones (unless the items were brand new at the start of the tenancy).

No Letting Go assesses fair wear and tear and depreciation values based on APIP and ARLA guidelines as well as those laid down by the Tenancy Deposit Scheme. Decisions are made taking into consideration a number of key criteria including the type of tenant. Depending on whether the tenant is a family, professional couple, single occupancy or students, the type of tenant will have a huge bearing on the overall wear and tear on items in a property.

For example, a family of four is likely to use a washing machine more often than a professional couple and therefore this needs to be considered and reflected in the decision. Likewise a medium quality carpet with a professional couple living at a property would last for typically five years, whereas a family occupancy would reduce the lifespan to typically three years.

The length of occupancy will also need to be taken into consideration – the impact of a two-year occupancy will be greater than the toll of a six-month occupancy. Equally, when a tenant has enjoyed a fiveyear stay in the same property, it becomes very difficult to prove unacceptable wear and tear. Consent for smokers or pets in the property will have implications on the expected condition of the property at the end of the tenure.

The tenancy agreement

The tenancy agreement may contain specific clauses relating to the required care and attention of particular items and amenities which the tenant has access to during the tenancy. Care of external living areas; the garden is a classic example, so often the cause of heated debate between landlord and tenant. In the majority of cases the garden will be treated as an ‘outdoor room’ and as such, should be returned to the landlord in the same condition or state of maintenance as when the tenancy agreement or inventory is first signed. This is an accepted requirement regardless as to whether or not the tenants take advantage of the garden facilities.

Inventory and Schedule of Condition reports and check-ins

As many as 70 per cent of letting agents don’t have a formal check-in procedure in place, which can have disastrous repercussions for the landlord. When a tenant moves into a property he or she should accompany the inventory clerk on a tour of the property to agree the content of the inventory report – and where necessary, the clerk will record any agreed amendments on the inventory (such as items listed but not found to be present in the property, or a difference in opinion as to cleanliness or damage).

Any outstanding issues should be noted on the check in report eg, missing manuals, further cleaning required, missing keys, any other concerns. The inventory and checkin report should be signed by both parties, ideally on the day the tenant moves in. Problems often occur when letting agents fail to chase up receipt of these signed documents when a formal check in has not taken place, since the tenant can potentially make changes to the property during that period which will then not be listed on the original inventory or check-in reports.

Interim property visit reports

Visits to check on the condition of the property should be undertaken every 3-4 months. Not only is this often not undertaken within the agreed time frames, all too often property visit reports fail to document key changes which will have an impact on the acceptable level of wear and tear of the property. Photographic evidence, receipts and estimates, which will provide evidence of problems that have been identified or rectified by the tenant, should all be included in the interim property visit report. Equally, if a landlord is required to replace an item which has broken down during the tenancy, eg a washing machine, this must be noted on the interim property report and added to the inventory as an addendum – failure to do this could result in the original damaged item being reinstated and the tenant having access to a brand new washing machine!

Fair wear and tear – where disputes arise

Cleanliness
What one person deems to be acceptable may be considered to be sub-standard by another. The important point to remember when it comes to assessing cleanliness is that agreement is reached at the check in stage. For instance, if a property was noted as dirty at the check in and either the agent or landlord arranged for professional cleaning to be carried out after the check in, then the tenant is required to ensure that the property is vacated in a professionally clean condition. The landlord or agent needs to ensure that the receipt for the professional clean at the check in is provided; although the tenant must be given the opportunity to clean the property to a professional standard themselves at the end of the tenancy should they wish to do so.

A good rule of thumb is to advise landlords to invest in a professional clean before the tenancy begins, which extends to the overall cleaning of the property (walls/ sinks/toilets etc) as well as to carpets and ovens.

Fixtures and fittings

Tenants need to be made aware that if they choose to introduce new items, which need to be fixed to the walls, agreement must be received from the landlord in advance. Failure to do this will result in the landlord asking for these items to be removed and making a claim to restore the wall back to its former state.

Quality of items

Most items in the property will have a pre-determined life span but this will also be influenced by the quality of the product, accepting that certain brands have an enhanced reputation for withstanding wear and tear, usually evidenced by an extended warranty. If a landlord chooses to furnish the property with cheaper, non-branded goods, it is only fair to accept that these may not last the duration of the tenancy.

Failure to observe the above guidance may result in the break down of what should be a harmonious relationship between landlord and tenant – and most importantly, will also activate the inconvenience and enormous distraction of a potential dispute case.

Nick Lyons is Managing Director of inventory specialists, No Letting Go. www.nolettinggo.co.uk

Inventory specialists

Professional bodies

The AIIC
The Association of Independent Inventory Clerks AIIC was established in 1996. Its aim is to ensure that every landlord, tenant and agent in the UK is aware of the importance of the inventory process and the benefits of employing an independent, professional independent inventory clerk.

The AIIC ensures that proper information and training is available for all members to provide the best possible service to the highest standards.

Members have to follow the AIIC Guidelines to Professional Practice and abide by the AIIC’s Code of Practice. They must have Professional Indemnity and Public Liability insurances.
www.theaiic.co.uk

APIP
The Association of Professional Inventory Providers is part of NFoPP. It aims to provide a service for in-house and independent inventory providers with advice, guidance and professional development through training courses and assessments. http://www.apip.org.uk

Inventory providers
www.inventorycheck.co.uk
www.nolettinggo.co.uk
www.arpm.co.uk
www.rushbrookrathbone.co.uk
www.thevideoinventoryagency.co.uk
www.propertyinventories.com
www.theinventorymanager.co.uk
www.inventoriesinc.com

The USB that’s a smart USP

Pinstripe Inventories uses the USB stick as a Unique Selling Point with its landlords and tenants.

The inventory report is possibly the least exciting factor of moving into a new home but modern technology simplifies the process.

Business Development Director at Pinstripe, Dominic Bargeton says, “With the various different technical solutions available to the inventory industry, now is a fantastic opportunity to develop a fresh and modern inventory service. When we check-in tenants, our clerks guide them through the property using our full size touch screen tablets – the user experience is really fantastic! Handing over a USB just completes this modern inventory process.”

Chris Wood, MD of Edinburgh based Woodstar Property Management, really likes the new idea;

“The USBs have been a really successful addition to the Pinstripe Inventory Service. The feedback from tenants has been entirely positive, as it allows them to engage in the inventory process much more than ever before.”

The USB delivered inventory has also proved to be very popular with tenants; 98 per cent said they preferred the digital report to a printed one. By using the USB stick it also allows for the digital amendment sheet to be handed over at the same time as the inventory report.

pinstripeinventories.co.uk