The Check Out
This is the final stage of any tenancy and the point when the benefits of having a well prepared inventory become apparent. It may be that many months has elapsed since the start of the tenancy which means unless you are blessed with a photographic memory the original condition of the property at the time of the ‘check in’ is likely to be ‘hazey’ at best. The landlord should arrange to meet the tenant at the property to go through the inventory and check its’ condition at the time that they are ready to move out. Ensure that you allow yourself plenty of time to conduct a thorough inspection. Use a copy of the original inventory to note down any item of damage or cleanliness. The landlord must be careful to make accurate and thorough notes as these could form part of your case should a dispute a rise and go to court or arbitration.
Identifying substitute items
I’m afraid it is not uncommon for tenants to swap some of the smaller items of supplied furnishings (curtains, lampshades, pillows, for example) for their own. I don’t have a problem with this as long as the tenant then puts back these items at the end of the tenancy. What landlords don’t want is that the tenant swaps their ‘rubbish’ with your good stuff. This is why it is so important when preparing the inventory to
fully describe each item, quoting colour size, model and serial numbers where possible
even code mark your items with say a unique indelible mark.
Identifying extra items
Gaining unwanted ‘stuff’ is sometimes more of a problem than loosing items or having them replaced by inferior goods. My experience particularly with students and sharers is that tenants can use moving as an opportunity to discard their unwanted belongings. I’m sure that they think that they are being very generous and if you are an avid ‘car booter’ it can provide a continuous supply of delightful ‘bric-a-brac’. I’m not and it is very time consuming and expensive to get rid of items; particularly larger ones such as furniture and appliances. Local authorities will generally take large domestic items away for a small fee of about £15; but why should you have to organise and pay for the removal of somebody else’s rubbish! I did have recently a case where a tenant left their car. Look out in particular for stuff being left in the cellar, attic and garage. These are all convenient hiding places often used by tenants. My advice to landlords is, don’t agree the ‘check out’ until the property is ‘completely’ cleared to your satisfaction.
One thing to note is that it is not necessary for the tenant to be present when the ‘check out’ is being compiled. Some landlords or agents actually prefer this to be the case because it allows them to concentrate on taking accurate and unbiased notes without having to answer directly to the tenant. The completed ‘check out’ statement can then be posted out to the tenant or a subsequent arrangement can be made to meet them to go through it if there are any areas of disagreement. Otherwise the tenant can post a signed copy of the ‘check out’ statement back. The downside to this two stage approach is that it is more time consuming as it requires that the landlord or agent have to make an additional journey to meet the tenant should there be any disagreement. My advice would always be for a landlord to agree the ‘check out’ at the property and on the day the tenant moves out. This way landlords are also more likely to get a signed copy of it back; than if they have to rely on the tenants remembering to post it to them. If the tenant does refuse to sign on the spot insisting on more time to consider the form, then this could be a warning that they will contest a landlords statement. This should prompt a landlord to make sure that their descriptions are completely accurate and that all evidence is gathered and verified.
One thing to note is that it is not necessary for the tenant to be present when the ‘check out’ is being compiled. Some landlords or agents prefer that this to be the case because it allows them to concentrate on taking accurate and unbiased notes without having to answer directly to the tenant. The completed ‘check out’ statement can then be posted out to the tenant or a subsequent arrangement can be made to meet them to go through it if there are any areas of disagreement. Otherwise the tenant can post a signed copy of the ‘check out’ statement back. The downside to this two stage approach is that it is more time consuming as it requires that the landlord or agent have to make an additional journey to meet the tenant should there be any disagreement. My advice would always be to agree the ‘check out’ at the property and on the day the tenant moves out. This way you are also more likely to get a signed copy of it back; than if you have to rely on the tenants remembering to post it to you. If the tenant does refuse to sign on the spot insisting on more time to consider the form, then this could be a warning that they will contest your statement. This should prompt you to make sure that your descriptions are completely accurate and that all evidence is gathered and verified.
‘Fair wear & tear’
The most common disagreements at the time of ‘check out’ occur around the topic of what constitutes ‘fair wear and tear’. It’s quite easy to decide on whether a bathroom cabinet is present or the cooker works. What is more difficult and subjective is whether the marks on the bedroom carpet are just a result of several years of use or red wine stains from exuberant parties. There is nothing in statute which defines ‘fair wear and tear’; the concept is too wide ranging to be enshrined in law. The Association of Residential Letting Agents (ARLA) has however produced some useful guidelines for its’ members on what to consider when coming to a view on it. These are:
- The original age, quality and condition of any item at commencement of the tenancy
- The average useful lifespan to value ratio (depreciation) of the item
- The reasonable expected usage of such an item
- The number and type of occupants in the property
- The length of the tenants occupancy
Legally a landlord should not end up, either financially or materially in a better position than he was in at the commencement of the tenancy or than he would have been at the end of the tenancy having allowed for fair wear and tear. It follows therefore (and is an established legal tenet) that a landlord is not entitled to charge his tenants the full cost for having any part of his property, or any fixture or fitting “put back to the condition it was at the start of the tenancy.” This would constitute betterment; appropriate remedies available to the landlord might range from:
- Replacement of the damaged item where it is either severely and extensively damaged beyond economic repair or, its condition makes it unusable
- Repair or cleaning
- Compensation for diminution in inherent value of the item or the shortening of its useful normal lifespan
There is a technique for taking into account fair wear and tear and also avoiding betterment and it is called apportionment. Apportionment is the process of breaking down the costs of ‘fair wear and tear’ into measurable chunks and thereby allowing you to assign a monetary value to items in what can appear to be a very subjective process. It is probably best illustrated by way of some very general examples:
1. Minor damage to an item, a small to medium stain or mark on a carpet or mattress etc – perhaps £15 – £35 e.g. the cost of a “spot” clean or, this amount as the tenant’s contribution to a full clean of the whole item, or as compensation for the diminution. A small to medium size chip or mark, scratch or burn on a kitchen worktop – perhaps £5 – £25. A landlord could of course decide to a purchase a new item, to have a new carpet put down or a new kitchen worktop installed if they wished, but they cannot lawfully charge the tenant for the full cost. The costs should be apportioned and shared between the parties on the principles given above. E.g. cost of new carpet £500 – apportioned £465 to landlord, £35 to tenant.
2. In the rare circumstances where damage ( to the worktop/carpet/mattress/ item etc) is so extensive or severe so as to affect the achievable rent level/lettability or quality of the property the most appropriate remedy might be replacement and to apportion costs according to the age and useful lifespan of the item. Below is an example of how this might be calculated.
(a) Cost of similar replacement carpet/item = £500-00
(b) Actual age of existing carpet/item = 2 years
(c) Average useful lifespan of that type of carpet/item = 10 years
(d) Residual lifespan of carpet/item calculated as (c) less (b) = 8 years
(e) Depreciation of value rate calculated as (a) divided by (c) £50 per year
(f) Reasonable apportionment cost to tenant calculated as (d) times (e)= £400.00
What happens if there is a disagreement?
Prior to the Tenancy Deposit Scheme (TDS) the landlord or agent holding the deposit would make a deduction to cover the costs of damage and then would refund the balance to the ex-tenants within 10 working days of the final ‘check out’ being completed. The tenant would then either accept the landlords’ decision or take the matter to the county court to recover the contested amount. The Tenancy Deposit Scheme ( TDS ) has changed this for tenancies created after the 6th April 2007. Refer to the section on the Tenancy Deposit Scheme ( TDS )for detailed guidance of what happens now.
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