Letting Agents are all too familiar with the large amount of work that letting a property entails, and the complex legislation that surrounds this activity. So when a Landlord offers to conduct their own Inventory, it can be all too tempting for an Agent to view this as one less thing to organise. Should Agents breathe a sigh of relief when this happens?
Kate Maddison, Key Accounts Manager for the Live Letting Exchange, provides some words of caution to Agents when Landlords choose to take on the role of Inventory Clerk.
“During my career as a Lettings Manager, Landlords would often advise that they did not wish to use our professional independent Inventory service and instead would be producing the Inventory themselves. Initially, this may seem reasonable and really of no concern to the Agent, especially if the property is not being managed - after all, a Landlord is free to make their own decisions regarding non-legislative matters. However, Agents presented with this scenario should proceed with caution and seek to establish solid proof that the Landlord has declined the professional independent Inventory service which has been recommended.
The Lettings company I worked for created ‘Inventory Disclaimers’ for use where Landlords opted to produce their own Inventory/Schedule of Condition documentation. The Disclaimer confirmed that the Landlord had declined Inventory service(s) and also clearly summarised how this could impact on them during a deposit dispute at a later stage. We wanted to ensure that we had on file written confirmation that the Landlord had made the decision to proceed in preparing their own Inventory and that they did so having been made aware of the potential consequences of this.
So why were we so concerned? There were several examples, but one particular case stands out.
My branch had been instructed to market the property of Mr and Mrs X who were moving out of the local area. Like the majority of Landlords, they were keen to save money and despite our best efforts to convince them otherwise, they decided to produce their own Inventory. The move-in day arrived, and the Landlords duly provided their own Inventory for us to use to check the Tenants into the property. The Inventory was written on a torn out piece of paper from a jotter pad, and consisted of the following: ‘Kitchen, Lounge, Conservatory, Cloakroom, Three bedrooms, Bathroom’ - there was no mention as to the furniture being left in the property (it was fully furnished), the condition of items or cleanliness etc. Similarly the garden had been completely omitted from the 'Inventory'.
We immediately tried to convince the Landlord that their Inventory wasn't sufficient and offered to call upon our Inventory provider to prepare a last-minute Inventory, but Mr and Mrs X were adamant that it was fine. Subsequently, the Tenancy ended after six months and the Landlords again decided to do their own Check-Out in order to save money. Unfortunately, the Tenants had used the fact that the Inventory was poor to their advantage; rooms had been redecorated, carpets and white goods removed, curtains were adorned with cigarette burns and even the shed in the garden had been removed.
The Landlords were distraught and thought that we would be able to help them, but unfortunately all I could reiterate was everything that we had told them previously about the limitations of their DIY Inventory. They asserted that this was not the case and that this conversation had not taken place. I was fortunately able to produce a copy of the Inventory Disclaimer that they had signed, which confirmed that the Branch was unable to accept any responsibility or liability that may arise due to them undertaking to produce their own Inventory/Schedule of Condition, and carrying out their own Inventory formalities.
A sad story, and nobody likes to see clients distressed, but I truly believe that without this Inventory Disclaimer, this would have resulted in the Landlords seeking compensation from us for negligence. And it wouldn't take too many claims like this to make a substantial dent in the P&L of any Lettings office.
As well as protecting the Agent, we found that a correctly worded Inventory Disclaimer also has the added benefit of encouraging Landlords to utilise professional prepared Inventory services. I would estimate that when presented with a robust Disclaimer for signature, eight out of ten Landlords had second thoughts and chose to a professional independent Inventory - often, of course, at the last minute..."
The Live Letting Exchange is a nationwide Inventory provider. To find out how your business could benefit from their services, please contact Kate Maddison, Key Accounts Manager, 07736517459 or kate.maddison@live-lx.com
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