Posts Tagged "Landlords"


Inventories hold the key to renting homes with pets, says AIIC boss

Inventories will be the last line of defence for landlords worried about having to allow pets in their rented properties, according to one industry leader.

Daniel Evans, chair of the Association of Independent Inventory Clerks (AIIC) says: “A detailed inventory showing the condition of a property at the start of the tenancy agreement is the only way a landlord can be sure of the extent of any damage which may have been done by a pet.”

The new Renters (Reform) Bill, currently going through Parliament, has been described as the most radical piece of legislation affecting the Private Rented Sector (PRS) for a generation.

It is intended to redress the balance of power between landlord and tenant.

One of the most controversial proposals is to make it easier for tenants to keep pets in rented properties. All they need is written permission from landlords but that permission must not be unreasonably withheld.

Deny permission

As things stand at the moment, landlords can ban tenants from keeping pets as part of their tenancy agreement.

But if the reform is passed, landlords will have to consider all requests from tenants who wish to keep a pet at the property and they will be required to allow or deny permission within 42 days in writing.

If a landlord refuses a pet request and tenants decide to challenge the decision, the matter could be referred to the courts or a newly-created PRS Ombudsman.

Daniel says: “A professional, independent, inventory is vital for any successful tenancy if disputes are to be avoided further down the line.

“But if more tenants are going to be allowed to keep pets, the danger of additional property damage only increases.

“Of course, most pet owners are responsible people but with the best will in the world, there is always a risk of damage when animals are left in properties.

“Any dispute may well centre around what constitutes fair wear and tear. The only way to resolve that is to have accurate documentation and photographic representation of the state of the property when the tenant moved in.”

Included among the provisions of the new reforms is a clause allowing landlords to request that the tenant buys insurance to cover their pets for property damage or organise their own insurance which would be paid for by the tenants.

In years gone by, landlords could have charged a higher deposit for pet-owning tenants but deposits have been capped at five weeks’ rent since 2019.

Necessary evidence

“Insurance cover will be helpful,” says Daniel.

“But sometimes pet damage is not discovered immediately – it may be weeks before it comes to light.

“Or maybe the tenant hasn’t kept up with the insurance premiums? In those circumstances the landlord will be looking to the tenant’s deposit to make good the damage. If that happens, the inventory will provide the necessary evidence to prove or disprove the case.

“The same may be true of the quality of décor or cleanliness throughout the property itself, or in the surrounding gardens or outbuildings, if they form part of the let.

“In some cases, the best way to deal with this may be through more regular property inspections. Who better to conduct those than the professional clerk who drew up the check-in inventory?”

The Bill is currently at second reading. Before it becomes law it needs to pass a committee stage, report stage, and third reading in the Commons before going through the same process in the House of Lords.


New law should make independent inventories compulsory

The Renters’ Reform Bill must include measures to make independent inventories compulsory in every tenancy agreement, says AIIC Chair Daniel Evans.

The controversial and long-awaited Bill was introduced into the House of Commons last month after being delayed for what the Government described as ‘procedural reasons.’

Now, Daniel has called on Ministers to take this opportunity to add strict regulations making the use of independent inventories by landlords and letting agents mandatory.

The Renters’ Reform Bill has been described as the most radical reform of the Private Rented Sector for a decade.

The proposals laid out in the Bill include:

  • The abolition of Section 21 (so-called ‘no-fault’) evictions;
  • The introduction of a Decent Homes Standard for the PRS;
  • A Government-appointed Ombudsman;
  • Restrictions on landlords’ ability to put up rents

It is generally believed that the Bill is intended to address imbalances within the PRS which, up to now, favoured landlords.

But Daniel believes this new legislation is the perfect opportunity to include a reform which would be independent of both landlord and tenant.

“Inventory companies have the capability of being the only truly independent agencies operating throughout the lettings process,” he says.

“It is clear the Government wants to ‘professionalise’ the PRS and this is an obvious place to start. Ministers should take this opportunity to include a clause which makes independent inventory mandatory.

Credibility

“Then, in the event of a dispute, the inventory will be valuable evidence to offer to the deposit protection scheme provider.

“But if this process is going to have credibility for the tenant as well as the landlord, that inventory must be curated by an independent agency.

“This increase in transparency is not just about tenants. Landlords, too, can benefit from utilising the services of a professional independent inventory clerk to improve the service for everyone.”

Daniel’s call comes after new data suggests the number of landlords planning to sell rented properties has reached its highest rate on record.

Polling by research consultancy BVA-BDRC found that in Q1 2023, 33% of private landlords in England and Wales said they planned to cut the number of properties they rent out. This is an all-time high recorded by BVA-BDRC and is up from the 20% who said they planned to cut the number of properties they let in Q1 2022.   This comes despite demand being at a record high with landlords blaming taxation policy, high interest rates and legislation for their withdrawal from the market. It is estimated that 65,000 properties were offloaded by landlords in the first quarter of 2023.


Everything you need to know about smoke and carbon monoxide alarms

There has been an update regarding the carbon monoxide and smoke alarm guidance and the Association of Independent Inventory Clerks (AIIC) is here to provide all the information you need to remain compliant.

The current regulation states that landlords must have a single smoke alarm fitted per storey and a carbon monoxide alarm where there is a solid fuel appliance, such as an open fire.

The new regulations are an updated version of the existing Smoke and Carbon Monoxide Alarm (England) Regulations 2015 which has now been updated by the Department for Levelling Up, Housing and Communities, and the new changes came into effect on 1 October 2022.

Which revisions do you need to be aware of?

From the due date, landlords will find themselves with increased responsibilities around the provision of smoke and carbon monoxide alarms within their properties.

A remedial notice will be introduced alongside the update, with fines of up to £5,000 for non-compliance.

Since October, landlords have the duty of equipping any room used as living accommodation containing a fixed combustion appliance, i.e., boilers with a carbon monoxide alarm. Gas cookers are exempted from this although it is also best practise to install these even if they aren’t legislated.

Meanwhile, once a tenant notifies their landlord that a smoke or carbon monoxide alarm is faulty, any non-operational smoke or carbon monoxide alarms must be repaired or replaced ‘as soon as practically possible’. This is one of the most significant changes to come about, whereas previously it was only necessary to ensure they worked at the start of the tenancy.

What type of smoke and carbon monoxide alarms are required?

There aren’t any specific regulations that state which type of alarms must be installed, such as hard wired or battery powered. If you have a battery powered alarm or you have plans on purchasing one, make sure that the alarm you choose is equipped with ‘sealed for life’ batteries rather than alarms with replaceable batteries since this is the preferred option.

It is, however, recommended that landlords make an informed decision and opt for alarms based on the individual needs of their property and their tenants. The only known requirements are that smoke alarms are compliant with British Standards BS 5839-6, and carbon monoxide alarms with BS 50291.

Who does this apply to?

Currently, the amendments only apply to England and involves all tenancies presently in place, which also includes both private and social landlords. There are some tenancies that are exempted, such as shared accommodation with a landlord or landlord’s family, long leases, and student halls of residence.

According to the government’s guidance, unlicensed HMOs will be affected by the changes; however, licensed HMOs are exempt from Parts 1 to 5 of the regulations, but only because the regulations also amend the HMO licensing obligations in the Housing Act 2004 so as to implement similar requirements.

It will be up to the tenants to report any faulty devices to the landlord or agent, and it will therefore be their responsibility to test their alarms throughout the duration of their tenancy.

Additionally, clerks in particular, should make sure the ‘expiry date’ is written on the alarms because this information is rarely included as standard on the alarm itself.

The government states that the new updated regulations, which will now be known as Smoke and Carbon Monoxide Alarm (Amendment) Regulations 2022, should be considered alongside other relevant laws on carbon monoxide and fire safety in rented accommodation. These include:

How do landlords prove the alarms have been tested?

As with the previous regulation, alarms should be tested at the start of the tenancy and it’s the landlord’s responsibility to keep a well-documented record of when alarms are tested thereafter.

As always, an inventory and check-in should be arranged at the start of the tenancy which will include smoke and carbon monoxide alarm testing. The report will set out the condition of the alarms, and the tenant should sign this if they are satisfied that they are in good working order.

As an agent or landlord, you want to protect your investments and establish smooth transitions from one tenant to the next. Here at AIIC, we are dedicated to promoting the highest possible standards of accuracy and reliability in the inventory process and have been endorsing high levels of professionalism in the inventory business since 1996.

It is our mission to ensure proper information and training is provided and our bank of highly skilled members will provide the best possible service. For more information, please contact us or search for your local AIIC member clerk now.

You can also download a copy of our Code of Practice and Guidelines for Professional Practice guide here.


Everything landlords need to know about deposit disputes

Deposits are a core element of any tenancy that keeps both the tenant and landlord satisfied and secured during the tenancy.

However, when things go awry, disputes may occur. Landlords and tenants sometimes disagree about deposits at the end of a tenancy and in many cases these disagreements can be resolved by having a detailed and comprehensive inventory in place.

While deposit disputes are relatively rare, they do still happen and can prove costly. So, landlords need to understand why they happen and how they can be prevented.  

Providing that it is stipulated in the tenancy agreement, which should have been looked over and signed by both the tenant and the landlord, a deposit can be withheld to cover any loss incurred by the landlord that is caused by the tenant, such as non-payment of rent or damage to the property.

Under the terms of the Housing Act 2004, it has been a legal requirement since April 6 2007, for landlords who rent a property on an assured shorthold tenancy to protect any deposit taken within 30 days of receipt.

Additionally, the tenant must also be served with a copy of the deposit scheme leaflet along with any other prescribed information.

At the start of a tenancy, landlords should ensure that all deposits relating to assured shorthold tenancies are protected within a government-approved tenancy deposit scheme – namely the Deposit Protection Scheme, mydeposits and the Tenancy Deposit Scheme.

In the scenario where the deposit has been paid by a third party, they must then also be provided with the statutory notice and associated documents.

But the real question is, what should landlords know about deposit disputes, and how curated inventories and training can reduce the number of instances these occur.

Figures from the Deposit Protection Scheme (DPS) show that, following disputes, 18.5% of tenant deposits are returned in full to the landlord, 54.7% are split between both landlord and tenant, and 26.8% are refunded in full to the tenants.

There is a clear difference between damage and fair wear and tear, which needs to be fully understood.

The criteria for deposit deduction must be properly understood before raising any disputes, with deductions not possible for fair wear and tear.

This seeks to prevent the landlord from ending up in a better position than they would otherwise have been.

The role of an inventory

At the beginning of the tenancy, your job as the landlord is not only to provide an adequate home for your tenant, but this is after all your investment, so to protect yourself and your property financially, it’s wise to turn to an inventory.  

This document provides a detailed description of the condition of the property when the tenancy started, including everything from the state of the carpets to the position of the furniture.

Photos are usually also included, which provides additional evidence for your inventory.

During the course of the tenancy, you should also consider carrying out systematic inspection of your property to update the inventory as necessary. Your tenant should also receive a copy of this inventory so they can check off items as they’re returned at the end of the tenancy.

Deposit dispute resolution and prevention

Thankfully, tenant deposit disputes are relatively rare, but in the event that they do occur, a landlord should first try and resolve any disagreement with their tenant amicably.

Give your tenant a breakdown of the amounts and items with the use of your inventory along with the tenancy agreement and show why and what any withhold money is for, whether that be for owed rent or damage to the property.

This is why it is absolutely vital that you prepare a quality inventory with a precise schedule of the condition of the property since this will substantiate any damage or missing items in the rental property, and how they go beyond what should be considered the reasonable wear and tear of the home.

Inventories provide supporting evidence that clarifies what does and does not count as fair wear and tear. Nonetheless, it is essential that before entering into a tenancy agreement, all parties have a firm understanding of this issue.”

As a landlord, you want to protect your investments and establish smooth transitions from one tenant to the next. Here at AIIC, we are dedicated to promoting the highest possible standards of accuracy and reliability in the inventory process and have been endorsing high levels of professionalism in the inventory business since 1996.

It is our mission to ensure proper information and training is provided and our bank of highly skilled members will provide the best possible service. For more information, please contact us or search for your local AIIC member clerk now.

You can also download a copy of our Code of Practice and Guidelines for Professional Practice guide here.


Landlords – ways to cut down costs with the use of inventories

With landlords facing rising costs, many are looking at ways in which to make efficiencies where they can.

Inventories, which offer a detailed list of all items and their condition included in the property – contents, fixtures, and fittings, etc – can help to reduce the chances of disputes occurring or landlords not getting money towards any repairs or maintenance for damaged goods.

Inventories can ensure a stress-free changeover between tenants, protect your investment, and ultimately help you cut costs in the long term. Although this is not a legal requirement, it is best practice since having a complete record of the condition of your property and its contents before and after the tenant’s stay will save you a world of hassle later if a dispute should arise between you and the tenant.

To ensure that the sector remains compliant, and evolves in a sustainable way, streamlined processes and time-saving efficiencies with the use of inventories has become a vital aspect in helping the letting industry while keeping standards at an exceptional level.

Here at the Association of Independent Inventory Clerks (AIIC), we recognise the financial trials landlords are faced with. Below, we look at how inventories can aid in cutting costs which will save landlords money and stress in the long-term.

Reducing the number of errors

Since inventories are meant to be a compilation of all the contents within your property along with details about the condition of the property – if done thoroughly and correctly, as a landlord you should be able to reduce the number of errors that may occur if you’re solely relying on memory.

For example, if contents are damaged and you don’t have evidence that it was in mint condition before the tenant moved in, then it will fall to you to replace the item – unnecessary expenditure on your part.

Therefore, having an inventory can prevent these occurrences from happening and can make clear that any damages or repair costs should be taken out of the tenants’ deposit. This way, you as the landlord won’t be liable for paying for repairs that were caused by the tenant and weren’t natural wear and tear.

Preventing disputes

Disputes can be another costly occurrence and if an inventory hasn’t been carried out correctly, this could make deposit disputes more probable, and also make the odds of you getting a deposit back less likely.

Therefore, having a concise, clear compiled inventory will help to prevent or lessen the chances of deposit disputes occurring. With a clear evidence trail for all parties to see, you will be able to avoid forking out cash to resolve the issue, which can take time to resolve – and we all know the saying, ‘time is money’.

By protecting yourself and your asset against deposit disputes with the use of an inventory, you can focus on things like growing your portfolio and sourcing the best kind of tenants.

Thwarting stress

Stress and finances have always been linked to a certain degree, and as a landlord you are already faced with many potential stresses on a daily basis, which is why cutting costs with the help of inventories can drastically make a difference to your overall wellbeing.

According to research, more than three in four Brits (74%) feel overwhelmed by stress, especially due to their financial situation. Having a comprehensive inventory not only gives you peace of mind, but will ultimately help you save a few pounds that’ll keep your blood pressure lower knowing that you’re protected.

As an agent or landlord, you want to protect your investments and establish smooth transitions from one tenant to the next. Here at AIIC, we are dedicated to promoting the highest possible standards of accuracy and reliability in the inventory process and have been endorsing high levels of professionalism in the inventory business since 1996.

It is our mission to ensure proper information and training is provided and our bank of highly skilled members will provide the best possible service. For more information, please contact us or search for your local AIIC member clerk now.

You can also download a copy of our Code of Practice and Guidelines for Professional Practice guide here.


Inspection photos and GDPR

Do you consider GDPR implications when taking photos at mid term inspections?

Tenants have the right to private enjoyment of the property they are renting.  The landlord or their representative are entitled to inspect the property at regular intervals, however the tenant can object to photographs being taken which include their personal belongings, photographs or items that could identify them. 

This creates a dilemma when it comes to inventory clerks carrying out mid term inspections.  Should you take room overview photos or not?  The simple answer is you need to ask the tenant for consent.  As long as consent is obtained in writing there should be no GDPR issues. 

When contacting a tenant to arrange a mid term inspection, it is good practice for the inventory clerk to ask them if they consent to room overview photographs being taken.  These photographs should only be shared with the parties relevant to the tenancy, such as the landlord, managing agent or tenant and should not be used for marketing purposes or shared on the internet. 

The AIIC recommends that our inventory clerks should always explain the procedure to the tenants upon arrival and ask them if there are any issues they would like noted on the mid term inspection report. Remember to explain that mid term inspections can protect all parties and help to avoid any issues with the deposit return.

If a tenant objects to photographs being taken, we suggest that the clerk only takes photos of smoke/heat/carbon monoxide alarms and any specific issues, i.e. leaks, black spotting etc with the tenant’s consent.  The clerk should provide a full written report detailing the condition rather than relying on illustrative photographs.

In any event, when taking photos of occupied properties, be sensitive and try to avoid the tenant’s belongings and family photos or paperwork lying around.  The purpose of the photos is to illustrate how the property is being kept, ensure there are no breaches in the tenancy occurring and check that there are no maintenance issues that have not been reported.


Agents and landlords – what should a good inventory include?

During the check-in and check-out process of any tenancy, one of the most important pieces of documentation you will have will be your inventory.

Not only do they ensure the maintenance and good condition of a rental property, but they are also crucial for preventing deposit disputes between the landlord and tenant.

At the start of a tenancy, tenants will sign a tenancy agreement detailing the rules and regulations they must adhere to. During this time, the inventory must be conducted, agreed upon, and signed by both parties.

Throughout the tenancy, landlords should make periodic inspections to note any damage that does not correspond to the inventory report.

Finally, at check-out, landlords must compare the condition of the property to the initial inventory to identify whether any deductions will need to be made from the tenant’s deposit.

With inventories playing an absolutely vital role in any successful tenancy, it’s important to understand what they entail and which pitfalls to avoid.

Here at AIIC, using our experience as the leading association of dedicated independent inventory clerks, we provide a comprehensive breakdown below.

What should a good inventory consist of?

In layman’s terms, an inventory is a list of all the items and contents in a property, as well as a detailed record of its general condition.

Before the tenant moves in, an inventory is created to ensure the landlord can monitor the state of the property and the items/contents included throughout the tenancy, and when the tenant moves out.

A good, detailed inventory will include a full written report of condition – also known as a schedule of condition – which is a thorough documentation of the property’s interior and exterior. That includes appliances, white goods, décor, fixtures and fittings, all contents, the garden and any outbuildings.

In addition, a full list of keys (and who they’re given to), equipment serial numbers, meter readings and alarm codes should be noted down. There must also be a declaration page at the end of the inventory for signatures.

While it isn’t mandatory, taking video or photographic evidence of the state of the home is advisable – particularly in regard to expensive items. This helps to remove any doubt about the original condition of items if a tenant tries to claim no damage has been caused.

Who compiles an inventory?

A comprehensive inventory requires time, effort, and skill, and should be unbiased and compiled to a rigorous, professional standard.

While an inventory can be crafted by the landlord, it is common to appoint an independent inventory clerk to do the job.

An inventory clerk who will offer an impartial, specialised service must be AIIC-vetted to guarantee peace of mind.

As an association, AIIC are committed to excellence and professionalism in the inventory process. Our efficient members work hard to avoid unnecessary costs and legal disputes – ensuring every party is aware of its responsibilities.

By appointing an AIIC-vetted inventory clerk with specialist knowledge, landlords can have confidence that everyone is legally protected and abiding by the necessary regulations.

Another alternative is for the letting agent to carry out the inventory. This could include the arranging of inventories and the management of the check-in process, quarterly inspections and overseeing the check-out process.

What happens at check-out?

At the end of a tenancy, a final inventory check should be passed as tenants move out. This is when landlords compare the two reports to see what, if anything, to deduct from their deposit.

The tenant must be present during check-out to run through the inventory piece by piece, and both parties should agree on any discrepancies before their deposit is returned. If anything is missing or has been damaged, calculations should be made as to how much it will cost for replacements/repairs.

An independent inventory clerk will mark on the check-out report whether they consider any damage or deterioration to be the landlord’s or the tenant’s responsibility. This should make it easier to decide if deductions need to be taken from the deposit.

On those rare occasions where there isn’t agreement between both parties, a third party may need to be brought in to mediate – this might be the letting agent or a tenancy deposit dispute service.

This, however, should always be a last resort, and all other avenues should be exhausted before taking this route. If the damage is clear, most tenants are likely to play ball. Still, the tenant must be made aware in writing what they owe and how much will be taken from their deposit as a result.

As an agent or landlord, you want to protect your investments and establish smooth transitions from one tenant to the next. Here at AIIC, we are dedicated to promoting the highest possible standards of accuracy and reliability in the inventory process and have been endorsing high levels of professionalism in the inventory business since 1996.

It is our mission to ensure proper information and training is provided and our bank of highly skilled members will provide the best possible service. For more information, please contact us or search for your local AIIC member clerk now.

You can also download a copy of our Code of Practice and Guidelines for Professional Practice guide here.


Insight – how should the check-out process be carried out?

The check-out process involves much more than just collecting the keys from tenants and arranging the return of the deposit.

In fact, it is one of the most crucial steps at the end of a tenancy, with a successful check-out able to reduce the chances of any deposit disputes occurring between you and your tenants.

For landlords, the check-out provides a concise record of the state of the property and its contents, while for tenants it offers the opportunity to state a case for any damage caused during the tenancy that might affect how much deposit is returned.

Below, we provide thorough insight into the check-out process and what steps are needed to avoid disputes and give you the best chance of getting your full deposit back.

Before check-out

Assuming the correct notice has been given and an end date has been established, the first step is to confirm, in writing, that any notice has been received and is being processed.

While the tenancy agreement will contain everything the tenants need to know, it’s important to familiarise them with key information of the tenancy agreement, as it may have been several years since they last saw it.

Leading up to check-out, your tenant will need to thoroughly clean the property (including flooring, upholstery, furniture, and all appliances), defrost the freezer, remove all waste, and clear the garden.

Arrangements will need to be made with the tenants to collect the keys, which is often best carried out at the property. This will allow you to walk through any issues found with the tenant in person.

Prevention is better than cure, so it’s worth explaining to tenants while they are still in the property what the consequences may be if items are found to be damaged in the property.

It’s also good idea to include ‘a guide to deposits disputes and damages’ from the chosen deposit protection scheme. Although lengthy, it could help answer any questions the tenants may have about the process.

During check-out

The process itself should go fairly smoothly, provided your tenant has carried out any necessary repair works and left the property in the same condition as when they first moved in.

However, if anything is missing or has been damaged, the only way you are able to make a claim against the tenant’s deposit, would be by providing evidence – and this is done via an inventory.

The most useful evidence that a tenancy deposit scheme would consider is a fully conditioned check-out inventory combined with a fully conditioned check-in inventory taken at the start of the tenancy.

An inventory should be professional and detailed enough to show clear photos of every item, the date and time stamp, and the document signed by the tenants to show they accept it as being fair and accurate.

If an inventory isn’t taken at the end of the tenancy, and the tenant disagrees with any deductions you’d like to make, you would find it extremely difficult to make a successful claim against them.

Appointing an independent inventory clerk could help to abate any uncertainty, as they will mark on the check-out report whether they consider any damage or deterioration to be the landlord’s or the tenant’s responsibility.

After check-out

If an agreement can’t be reached between both parties, or if there are issues that need rectifying, you’ll want to carry them out right away. If using contractors, for instance, you’ll need to keep copies of all the invoices as this would be evidence you’ll need in the event of any dispute.

Once all the work has been completed, you’ll need to formally explain your findings to the tenants, and have them sign their approval to deduct any funds from their deposit.

When compiling this document, it’s best to show the condition of the item in question at the start of the tenancy and at the end of the tenancy, which clauses in the tenancy agreement they have allegedly breached, explain what actions have been taken and detail the costs and any adjustments

At this point, the evidence will be self-explanatory, and tenants should agree to any deductions. If not, however, a third party may need to be brought in to mediate, such as a tenancy deposit dispute service. This should always be a last resort, and all other avenues should be exhausted before taking this route.

If the case goes to adjudication, you will be required to provide evidence to the tenancy deposit scheme that you use. Once you have agreed on how much of the deposit should be returned to the tenant, you then have 10 days to send the money back.

Here at AIIC, our independent inventory clerks can help to streamline the check-out process, providing detailed reports, photographic evidence, suggestions for compensation costs, and more.

We are dedicated to promoting the highest possible standards of accuracy and reliability in the inventory process and have been endorsing high levels of professionalism in the inventory business since 1996.

It is our mission to ensure proper information and training is provided and our bank of highly skilled members will provide the best possible service. For more information, please contact us or search for your local AIIC member clerk now.

You can also download a copy of our Code of Practice and Guidelines for Professional Practice guide here.