Landlords in the UK are out of pocket to the tune of over £5bn every year because of damage to property and unpaid rent. Tenants’ rent arrears account for around £900m in costs annually, while damage to landlords’ property sees them fork out an incredible £4.5bn.
Research shows that broken appliances are one of the biggest problems when it comes to property damage. Damage to carpets and decorating is also prevalent, while cigarette burns remain an issue – despite many rental properties not allowing smoking inside. Over a third of the landlords surveyed also stated lack of cleanliness as a common concern.
According to the latest TDS stats, property damage is the second most common cause of disputes (52%). Historically, many tenant disputes have gone in favour of tenants, as there was simply not enough evidence to support the landlord’s or agent’s damage claim. Many landlords and agents feel tenants are not held to account when damage is caused and that there is little they can do to protect their property. Furthermore, landlords and agents have a poor record in winning tenant dispute cases.
So, how can landlords and agents protect themselves from costly damage?
Firstly, it is so important that landlords and agents carry out background checks on potential new tenants.
Picking the right tenant can save landlords and agents from a long, costly eviction process further down the line. Be thorough in conducting background checks and reference gathering, including bank statements for the past three months, previous landlord and agent references to check the tenant paid rent on time and credit checks, incorporating fraud indicators and employer references. Check identity and proof of current address – ideally tax or insurance documents – and talk at length to a prospective tenant.
Secondly, landlords and agents should make regular interval inspections (at least every three months) to record the condition of the property and arrange repairs for any damage or wear and tear as soon as possible. Normally, visits should be arranged for a convenient time for the tenants and landlords and agents should give at least 24 hours’ notice. However, entry can be made without notice for emergency repairs (e.g. in the case of flooding).
Landlords and agents should ensure that the lease agreement also gives them a reasonable right of access to inspect the state of the property and to provide any agreed services (e.g. cleaning or gardening).
Finally, landlords and agents need to protect themselves at the start, during and at the end of a tenancy agreement, ensuring that there is a professional inventory, check-in and check-out. The best way for landlords and agents to protect their property and avoid a dispute is by ensuring that the condition of the property is fully recorded at the start of the tenancy, with a comprehensive inventory, along with a thorough check-in and check-out report.
What do landlords and agents need to look out for at check out? The most important focus of a check-out is to make sure the property has been left in the same condition that it was in when the tenant moved in, allowing for reasonable wear and tear. To enable landlords and agents to do this job properly, it is vitally important that they have an inventory; the inventory must be fully detailed and supported by photographs where necessary. A check-out is very much reliant on an efficient check-in process. Without an inventory, a landlord or agent is unlikely to be able to deduct any money from a deposit, as there will be no proof as to what condition the property was in at the beginning of the tenancy.
The most common mistake in inventories is the lack of detail. Often there are not enough appropriate photographs with accompanying description to show the condition of the property and its contents. For example, many landlords and agents fail to record the condition of sinks and bathroom fittings, as well skirting, doors, floor coverings and kitchen units. If an inventory is not a professional and thorough report on the property, it is not worth the paper it is written on.
Inventory reports should note detail on every aspect of damage and its location at the start of a tenancy. Good photographs provide vital evidence and should be of a high quality when printed on A4 or A3 size paper, making any damage clearly visible.
Unless landlords and agents have a water-tight inventory, they are at risk of disputes and expensive repair bills. Our research shows that landlords and agents who have switched from analogue to digital inventories have seen their tenant deposit disputes drop by more than 300% and their success rate at adjudications improve by an average of 75%.
Normal wear and tear is a fact of life with rental properties, just as it would be at home; but if landlords and agents wish to avoid the hassle of disputes over responsibility for damages, they need to prepare a thorough inventory of the condition of the property that details the condition of every item within.
There are a number of professional inventory providers, including us. We have designed Imfuna Let to ensure landlords and agents have a bulletproof inventory that records property check-in condition status and can also be used for mid-term property inspections.
Jax Kneppers, the co-founder of Imfuna Let.
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Tenant Histories (aka 'Lifestyle Referencing) coupled with your credit check is a great tool for landlords to find out whether applicant tenants have damaged rented property previously.
A decent Rent Guarantee Insurance, with Legal Expenses and Malicious Property Damage Cover included will also protect against costly property damage.
Please check out:
http://tenantreferencinguk.com
http://rentsafeuk.co.uk/
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Last July I gave my tenant a section 21 due to alterations to my property. They stopped paying rent for two months, so I went to see my solicitor who said it became a section 8. I emailed the tenant saying you have 7 days left to leave or you will end up in court within 14 days. The neighbour told me they panic to leave, on the way out they did a lot of damage to the property, kitchen, toilet and bathroom. All this came to over £8000 pounds. The insurance would only pay £3700 say it came to too much. This has left me in dept to this day.
And the deposit was????????????????
So who is going to start the list of bad tenants?
I required a homeowning reletive/friend to stand guarantor for my tenants.
The theory is they will put more pressure on the tenant to behave than I can
The type of damage done is not the sort of thing you would take a photo of e.g my kitchen worktop had been peeled off in a strip of around 3'. According to TDS I needed a photo of every square inch of kitchen worktop to be covered - despite the fact that my ex tenant signed the inventory without saying it was already damaged (it definitely was not) TDS believed her. £16k it cost to repair the fire damage outside of the house and fortunately I was covered by insurance (but that wasn't straightforward either). She broke 2 basins but because I didn't take photo of the pedestal for one or a photo of under the basin bowl for the other, TDS would not let me keep the deposit to pay for them and the insurance would call each damage a separate claim and I would have to pay the excess of £250 for each claim. Same with smashed kitchen floor tiles - ins would only cover the broken 12 not the others which I can't match. My inventory claims 2 brand new 3 seater recliner sofas. Nothing for them either because of we are and tear - you should see them! In 2 years they've been used as dog beds and covered in pee stains and stink to high heaven. Again, TDS say its wear and tear. Insurance call it malicious damage - all in all it has cost me £5k inside repairs plus whatever a gardener is charging me for putting garden and patios right plus new cover for hot tub. They also destroyed the American fridge freezer so I have to pay to cart it away. I'm afraid that TDS also don't look out for the landlord - they only let me keep £500 of the deposit. Nobody looks after the landlord and I'm done. I'm selling up completely.
Yes, background checks are very important. However, it’s not the only tool that could be used for tenants verification. If you want to secure your property, you should also ask for landlord references and this article https://rentberry.com/blog/screening-prospective-tenants states the same. So, call property owners and ask them everything you want to know about an applicant. Ask their previous landlord if there was any damage caused during the tenancy beyond normal wear and tear. Inquire whether the renter was a good communicator or not, cause you will need to communicate with them concerning property maintenance.
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