Independent inventory - Case studies

Under the revised terms of the Housing Act 2004 it is stipulated that all deposits taken by Landlords on an a Assured Shorthold Tenancy must be protected by a Tenancy Deposit Scheme. The Tenancy Deposit Scheme, was set up to protect the tenants deposit from both unscrupulous Landlords and Agents. Once the deposit is lodged with the Deposit Protection Agency then it requires the written agreement from both parties to release the deposit back to the tenant.

If both parties cannot agree then the dispute is taken to Arbitration within the scheme’s rules. The ICE (Independent Case Examiner) will ask for supporting documentation to support any claim made.

Supporting documentation is primarily the Inventory, check in report ,check out report and the Tenancy Agreement. Any correspondence between both parties will also be considered if it is relevant.

In any dispute the Inventory is critical. If the inventory is out of date, nonexistent or of poor quality, the Landlord is immediately on a backfoot in making any claim at all unless the tenant admits to the claim.

The actual inventory should be of a high standard and not only be a comprehensive list of all fixtures, fittings and contents, but should provide a full schedule of each individual items condition.

There is a huge difference between a professional inventory drawn up by a fully trained experienced inventory clerk than some appalling in house Letting Agents attempts and a Landlords own. I have regretfully seen 3 bedroom properties summarized on an A4 piece of paper which fills me with dread. These are at best a list of “items” bearing no detail of their condition. In an arbitration situation if the sofa is listed as “Red Sofa” then there is no claim for any wear and tear on the sofa as this was not itemized and agreed.

Since the new legislation came into force, the number of deposit disputes going to Alternative Dispute Resolution has dramatically increased with over 1,000 tenancy deposit disputes a month. The need for detailed, consistent and well documented inventories has never been more important and highlighted.

The inventory and schedule of condition should itemise every wall, flooring and surface, clearly describing its condition. Every mark noted should be accompanied by a photograph that clearly shown the size and detail of the mark so there can be no dispute at the end of the tenancy. Detail like the make modal and condition of appliances are especially important as are detailing the quality and colour of light switches and socket covers. Every room should have the standard of paintwork recorded with any viable marks, dents or scratches evidenced by a photo. The cleanliness is of paramount importance.

All this may seem quite anal. However many “stories from hell” that we hear about can be resolved by a proper inventory.

Case Study 1

A Landlord let a brand new apartment in central London. The newly plastered wall has a fresh coat of paint. The curtains and furnishings were all brand new.

At the end of the tenancy the photo of the room looked almost exactly the same bar the yellow tint to the walls and ceiling.

The Tenancy Agreement stipulated no smoking. The check in report noted everything in A1 condition.

The check out report detailed the staining to walls and ceiling and impregnated tobacco smell in all the soft furnishings.

The tenant disputed the claim, but the Landlord was able to successfully claim for redecoration, carpet cleaning and all upholstery cleaning to be carried out.

Case Study 2

A Landlord let a period family home that was presented to a good standard. At the end of the tenancy though, what the inventory clerk noted, (that both the Landlord and agent has missed) was the tenant had taken the new Bosch kitchen appliances and replaced with Hotpoint. In addition the gold effect light switches and sockets had been replaced with white plastic.

The tenant left with no forwarding address having just posted the keys through the Letting Agents door. Clearly not expecting any deposit back. The Landlord whilst having to go through the dispute process successfully claimed the whole deposit back as the inventory clearly detailed the missing items.

Case Study 3

A Landlord let a modern 4 bedroom family home in good order. The property having previously been the family home. They had all the carpets cleaned before the start of the tenancy and a professional clean. At the end of the tenancy the carpets were in a bad way, above fair wear and tear, and the children had marked the walls with crayon. In addition the children’s bedrooms had been painted in bright colours. Thanks to a detailed inventory report the Landlord was able to claim the full cost of redecoration to the bedrooms and part redecoration costs elsewhere, part cost of a replacement carpet and the cost of a clean.

Without an inventory agreed by both parties, it comes down to hearsay. I strongly advise all Landlords that an inventory is as essential as the Tenancy Agreement itself.

Most of the time, the deductions from tenants deposits are quite straightforward. Normally cleaning is to be expected with a few minor amounts taken for broken or missing articles, especially if the property is furnished. However it’s when there are grey areas that the inventory becomes invaluable.

A good Letting Agent should be able to show you what a good inventory looks like and be able to arrange one to be complied at your property.