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The Importance of An Inventory - 23.07.2012

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. 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.

Supporting documentation if this happens 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 If the inventory is out of date, nonexistent or of poor quality, the Landlord is immediately on a backfoot in making any claim at all unless the tenant admits to the claim.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. Since the new legislation came into force. 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 shows the size and detail of the mark so there can be no dispute at the end of the tenancy. Detail like the make, model and condition of appliances are especially important.

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.

Detailed below is an example of a case where the landlord was left without a legal leg to stand on!

Case Study 1

After a tenant moved in, she was very reluctant to let the landlord enter the property, the landlord decided to take a relaxed approach. It was on leaving the property that the problems began.....

The landlord wrote after the event whilst admitting he had no inventory in place.....

The tenant is denying that the place is dirty (it is filthy) and wants her deposit back! With so many breaches of the tenancy agreement and so much cost to put the place right, how can she have a leg to stand on? The agency is in the process of getting quotes for the cleaning, decorating and gardening and it is going to run into considerably more than her £800 deposit. It will no doubt be referred to an arbitrator, as she is not agreeing she has done anything wrong. Would any arbitrator in their right mind tell us to give her her deposit back, given the above?

And an example of where the landlord had a full comprehensive inventory in place with supporting dated pictures...

Case Study 2

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.

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.

The overriding message is don't let a property without an inventory! For the cost of a small initial outlay you can be safe in the knowledge that your investment and home is fully protected.

With Passion For Property able to do inventories from £90.00 plus VAT, this really is a small price to pay to protect your property.

 

Electrical Safety in Rental Property - 20.07.2012

Apart from the Landlord's Common Law duty of care, the Landlord & Tenant Act 1985 requires that the electrical equipment is safe at the start of every tenancy and maintained in a safe condition throughout the tenancy.

In the case of commercial property and houses in multiple occupation there is a statutory duty under the Regulatory Reform Fire Safety Order 2005 to carry out annual Fire Safety Risk Assessments, which include electrical safety risks.

If you let property you must ensure that the electrical system and all appliances supplied are safe - failure to comply with the Electrical Equipment (Safety) Regulations 1994 and the The Consumer Protection Act 1987 is a criminal offence and may result in:

• A fine of £5,000 per item not complying
• Six month's imprisonment
• Possible manslaughter charges in the even of deaths
• The Tenant may also sue you for civil damage
• Your property insurance may be invalidated

Landlord Guide

It is important to ensure that all electrical appliances and fittings within the property are safe and in good working order.

Unlike gas regulations, there is no law that says you must have a landlord electrical safety certificate. But, should any electrical fittings or appliances within your rental property cause harm to a tenant you could be held liable.

You are advised to make visual inspections yourself as landlord or agent in residential properties (record on a safety checklist) and have periodic checks carried out by a qualified electrician.

• Ideally, ensure that the electrical system complies with the latest wiring regulations.
• Make sure a circuit breaker (RCD) is fitted to power circuits.
• Ensure that operating instructions and safety warning notices are supplied with the appliances.
• Ensure that plugs and sockets conform to BS1363 or BS1363/A for heavy duty uses.
• Make sure that tenants know the location of and have access to the main consumer unit, fuses and isolator switch.

Regulations

There is no statutory obligation on landlords or agents to have professional checks carried out on the electrical system or appliances. However, under Common Law and various statutory regulations: The Landlord and Tenant Act 1985, The Housing Act 2004, The Electrical Equipment (Safety) Regulations 1994, and the Plugs and Sockets etc. (Safety) Regulations 1994, both of which come under the Consumer Protection Act 1987, there is an obligation to ensure that all electrical equipment is safe.

In January 2005 new legislation under Part P of the Building Regulations make it a requirement that for certain types of electrical work in dwellings, plus garages, sheds, greenhouses and outbuilding comply with the standards. This means a competent electrician must carry out the work. For DIY electrical work you must belong to one of the Government's approved Competent Person Self-Certification schemes or submit a building notice to the local authority before doing the work.

Compliance

We recommend:

• Inspections on tenant change-overs, recording electrical equipment, its condition and fuses fitted - see PAT Testing.
• Periodic inspections of electrical equipment by a qualified electrician.
• 5 yearly inspections by a qualified electrician to ensure safety and that the electrical system complies with current electrical regulations.
• Keep all records of these inspections.

Due Diligence

In the event of a tenant complaint or an incident the defence of "due diligence" may be accepted where it can be shown that the landlord or agent took all reasonable steps to avoid committing an offence - you will need documentary evidence of this.

A private owner letting a single dwelling (not in the course of business) may have a defence, whereas an agent acting on his behalf will not. However, an agent merely introducing a tenant and not becoming involved in the inventory or management of the tenancy my well be exempt from liability.

Why leave yourself open to the unknown, make sure you are completly covered by letting Passion For Property carry out the annual gas and electrical PAT Testing done for £120 plus VAT.