Should Landlords Pay For An Inventory?

by Frazer Fearnhead

12:13 PM, 16th November 2011
About 7 years ago

Should Landlords Pay For An Inventory?

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Should Landlords Pay For An Inventory?

One thing I have learned from our experiences working with letting agents around the country is that they operate in many different ways. That’s not just between different agencies but also between different offices within the same company. Here in Altrincham, Cheshire, for example, they tend to operate in a very different way from letting agents just a few miles away in Manchester city centre.

Although Altrincham is an affluent area, it is extremely competitive and agents need to include inventory costs within their fee structure, whereas in the city centre, agents tend to charge landlords £100-£120 in addition to the standard fees (although the inventory costs are usually absorbed by the agent if the property is being fully managed).

Running an inventory company, we believe that a letting agency owes a duty of care to its landlords to get a proper inventory done, one that will stand up in court and not simply provide a basic checklist which, frankly, isn’t worth the paper its written on. We do of course appreciate that they are sometimes not able to make additional charges to landlords and still win instructions.

An inventory is supposed to be an objective record of the state of the property and its contents and although in the large majority of cases we are instructed by the landlord or letting agent, our service is also of value to tenants. Many of these tenants see the sense in acquiring a fair and accurate inventory as at the end of the day, they do not want to see their deposit tied up for months at a time whilst a dispute is being adjudicated.

Many tenants have at some point been subject to their deposits being (in their opinion) unfairly retained and we find that most are open to the idea of paying or at least contributing to the costs of a good quality inventory.

It therefore seems fair to us that the costs of an inventory and checkout should be borne not just by the landlord but by both parties. In fact, that is what at our suggestion, many of our clients have now started to implement successfully. Sometimes the fees are split 50/50 or sometimes the tenant pays for the inventory and the landlord for the checkout.

Either way, in our experience, both parties normally recognise it is fair for the cost of the inventory to be shared equally. If cost is an issue and is preventing you from protecting your property and its contents with a quality inventory service, perhaps sharing those costs could be a viable solution?



Comments

Nick Stott

17:35 PM, 16th November 2011
About 7 years ago

Hi Frazer,

This is a constant problem for me at HOMEsure. No-one wants to pay for an inventory because, like insurance, you're only really glad you got it if you ever have to use it. It feels like dead money if you don't use it, even though that's half the point-it puts of tenants from making spurious counter-claims or thinking they have a leg to stand on.

But there are plenty of appalling landlords out there too, and whenever I do an inventory it's made crystal clear to tenants that it's in their best interests too.

It's obvious that the cost of an inventory should be split equally but it's hard to convince tenants of this.

P.s. Just started using TVIA and I'm very impressed...

Mary Latham

20:13 PM, 16th November 2011
About 7 years ago

Nick just a thought calling your customers "appalling" may not go down too well?

Most landlords do not realise the real value of a good Inventory. I try really hard never to stop money from tenants deposits and I will take the loss rather than fall out with them if they have been good tenants and yet I do a very detailed Inverntory. Why?

I include a room plan with each item numbered - those numbers are them listed against each item on the Inventory.

If there is a fire and "granies" armchair is full of bad foam or fabric that burns and gives off a fume - it is not on my very detailed Inventory or room plan - I am not to blame.

If someone trips over furniture that may be positioned to cause a hazzard - I did not leave it there as can be seem from my room plan.

If an item has caused an electrical issue - it was brought in by the tenant because it is not listed on my Inventory etc etc

A good Inventory will cover your back in so many ways just as a good AST will.

If a landlord is not skilled enough to get the document right it is worth paying someone who is because they day you need the document you will be very glad that you did.

The message from me is Never mind the deposit that is the least of the problems that can be solved by a good Inventory.

Nick Stott

21:38 PM, 16th November 2011
About 7 years ago

Whoops! I didn't mean any of MY landlords are like that!

I've never had an unfair landlord as a client to be honest. And the deposit refunds are testament to that.

However, I've helped new tenants deal with some horrible previous landlords who are making spurious claims against them.
In fact, just today, a new tenant of ours is being accused of breaking into their own house and damaging the property... when they were in Australia!!

Some landlords see deposits as 'bonuses' and really try and take advantage of some tenants, so I reassure tenants of ours that, even if their landlord did turn into a rogue, that they are fully protected by their inventory.

Tenants always seem more bothered by the inventory than landlords too which I find interesting? Before deposit protection schemes a lot of tenants were poorly treated, but now the balance seems to have swung further the other way, and decent landlords are being tarred with the same brush as rogues.

Mark Alexander

21:46 PM, 16th November 2011
About 7 years ago

Nice recovery there Nick 🙂

Nick Stott

23:07 PM, 16th November 2011
About 7 years ago

Ha! 'Must try harder'... :-p

Mary Latham

23:13 PM, 16th November 2011
About 7 years ago

Nick only a very tiny % of those tenants whoes deposits are protected through MyDeposits actually go to ADR. I haven't time at the moment to pull up the figures but I promise you I am speaking from information given to me by MyDeposits. I do realise that there were and are landlords who do not treat their tenants fairly when dealing with deposits but there are also many landlords like me that take the hit on their losse, we do so now and we did so before TDP legilsation. In my experience landlords who are not fair fail to protect the deposit in the first place and therefore the legilsation has made very little difference if any.

A change of thinking is more powerful that legislation and only education can change a persons thinking.

There are also tenants who get away with a lot of damage and rent loss because many of us are so glad to see them go that we just roll up our sleeves and move on.

Mary Latham

23:15 PM, 16th November 2011
About 7 years ago

Ooops pressed send too soon again !

Lets not spoils this thread by concentrating on the bad guys they are probably not reading it anyway. Lets work together to help the good guys to survive and thrive and offer decent homes to decent tenants while at the same time keeping their backs covered in an increasingly litigious world.

Ian Ringrose

9:27 AM, 17th November 2011
About 7 years ago

When I rent a car I am not expect to pay for it to be check over and documented when I collect it or return it, it is included in the rental charge.

Therefore I don’t see why tenants should have yet another change, above the price that what shown on Right Move.

We all hate it when airlines do it do us, so why are we doing it to tenants?

(Should we just charge more rent for the first 6 months, and then have a predefined discount for long term tenants, as they cost us less?)

Mark Alexander

9:33 AM, 17th November 2011
About 7 years ago

Interesting thoughts Ian, particularly your last sentence in brackets. The main issue I can see is that inflating the price for the first six months with a promise to discount thereafter might be viewed with suspicion by tenants, especially if only being offered a six month AST. Also, how attractive would the advert look on the portals? The concept is interesting from an intellectual perspective but I'm not sure it would actually work in practice. Have you tried it?

Ian Ringrose

9:59 AM, 17th November 2011
About 7 years ago

We use agents, so we can't try that sort of thing.

The old concept of a “key charge” was at least clear and there was only one charge to move in on top of the rent and the deposit.

The first step will be for someone like RightMove to require all listing to including the total moving in charge, moving out charge and renewing charge.

I am starting to think it may be possible for another site to compete with RightMove, by quality controlling their listings and only allowing truthful listings. However you have to be very brave to start a site when the aim of turning away customers! Unless the sight is started by a like minded group of agents and allowed other agents that thought the same way to join.

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