Residential and Commercial
Property Inventories
A property inventory is the catalogue of a rental property and all its contents. The Schedule of Condition is a record of the condition of all these items. Usually the property inventory and Schedule Condition are combined into a single report, so therefore referred to as either, or both.
A property inventory / Schedule of Condition has several functions:
- It is a catalogue of the property being let
- It records the condition of the property and any items that are included in the tenancy
- It forms part of the legally binding contract that is set out in the tenancy agreement between the tenant and the landlord.
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Why is it important to prepare a property inventory / schedule of condition?
Before the advent of the Tenancy Deposit Scheme many landlords didn't bother making a property inventory, or if they did, it was a few scribbled notes on a scrap of paper. The fact was, prior to the Tenancy Deposit Scheme landlords were free to be both ‘judge and jury’ when it came to repaying a tenants deposit. The rental deposit was held by them and if the tenant didn't like it then they would have to come and get it. The power was all in the landlord's hands.
It's not to say that tenants had no remedies. If a tenant felt aggrieved with a landlords decision on how much of their deposit they were getting back, under the pre April 6 2007 system they were able to take the landlord to court to argue they thought that they were unreasonably withholding their deposit. The judge would then decide on the merits of the tenants claims. However, the ‘hassle’ and inconvenience to the tenant of carrying this through, meant that in most cases tenants didn't bother to take matters any further, particularly if relatively small sums were involved.
The Tenancy Deposit Scheme (TDS) and its effect on property inventories
The Tenancy Deposit Scheme (TDS) changed the cosy amateur approach to preparing a property inventory in several ways:
1. The landlord no longer controlled the deposit monies
2. Tenants have been emboldened to take on the landlord if they think they even have a chance of winning the argument over a deposit claim. There has been a large jump in the number of cases where the tenant disputes the withholding of all or part of their rent deposit
3. The property inventory has become the key document in proving the condition of the rental property before a tenant moves in
4. The way of assessing disputes over a tenant's deposit has changed. Rather than matters being resolved through the courts, they are mostly decided by independent arbitrators. Arbitration is generally seen as less adversarial and more fixed by legal procedure than the courts.
The Tenancy Deposit Scheme has shifted power over the tenant's deposit away from the landlord. This has transformed the importance of making a clear and accurate recording of a rental property. A well prepared property inventory including an accurated record of its condition needs to be made at both the ‘check in’ and ‘check out’ of a tenancy.