Property Inventories And The Tenancy Deposit Scheme - How The Two Interact

In rental agreements there is provision for a landlord to receive a deposit or a bond at the beginning of the tenancy contract. The primary function of the deposit or bond is to serve as security against financial losses incurred by the landlord if a tenant fails to carry out its obligations of the agreement. The amount of deposit received by the landlord can be a substantial amount. The deposit does not constitute income to the landlord and should be returned to the tenant at the end of the tenancy if the tenant has faithfully carried out his or her obligations.

However, life is not that simple and there are sometimes bad people on either side of the contract on both the landlord or the tenant side. For example, you can get landlords who don't return the deposit to the tenant at the end of the tenancy. You also get tenants that mistreat and damage a property or pay rent irregularly.

To help alleviate a number of the problems associated with deposits, some countries have introduced schemes to prevent the misuse of the deposit. In the United Kingdom this is known as the Tenancy Deposit Scheme. The Tenancy Deposit Scheme regulates the deposit since it is a legal requirement for a landlord to protect the deposit very soon after the landlord has received it at the beginning of the tenancy.

Protection of the deposit can be achieved in two ways. One way is by the landlord passing the deposit amount to a government approved organisation who looks after the money on both parties behalf. The second way is for the landlord to get an insurance certificate from a government approved company. With the second method the deposit will be held with the landlord for the entire duration of the tenancy until the tenant has vacated the property. If the landlord has not returned the deposit at the end of the lease then the tenant can contact the administrators of the Tenancy Deposit Scheme to claim the money through arbitration. Arbitration will look at both sides' cases to see if there are any legitimate reasons for the landlord to withhold the deposit.

Property inventories become important in deposit dispute situations because these documents can be submitted as written evidence to support their cases. Most often, the burden of proof is for the landlord to submit reasons why a deposit should be withheld by the landlord. If the reasons are to do with property damage then the relevant document to submit is the property inventory. The property inventory is a comprehensively written document signed by the tenant which states the condition and contents of the property when the tenant first moved into the property. The landlord should also submit evidence of the condition of the property at the time the tenant vacates it. Any differences in the property at the time the tenant first moved in and the time the tenant moves out will give a good indication of how the tenant has or has not taken care of the property. It is imperative therefore that all landlords should record property inventories before it is rented out since the case for withholding a deposit will be very weak if there is no written account of the starting condition of the property.

Property inventories can be written by companies who specialise in the documentation of the condition and contents of houses and apartments. These same property inventory services companies can also help in the mediation between the landlord and tenant if there is property damage to prevent the necessity to go to arbitration under the Tenancy Deposit Scheme. The desire by the government is for the landlord and tenant to work things out together before it goes to arbitration and property inventory services companies do have lot of experience in mediating things before other instruments of resolution are needed.

If you would like to discover more about property inventories or about how specialist property services companies can help in tenancy deposit disputes, visit property inventory services.

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