Perhaps the most important pre-cursor to signing a lease agreement is the proper completion of a property condition checklist PRIOR to your tenant’s move-in.  Use this form to document the property’s condition prior to locking a tenant into a lease and collecting a deposit from them. 

Do It Prior to Move-in

Waiting to complete the property condition checklist until after you’ve signed a lease, could make it difficult to compel the tenant to complete the move-in checklist without having to take legal steps. 

Even in a situation where a tenant is forced to sign off on the checklist, you now are dealing with a situation where items are already moved in a defects may have already been created or covered up which can no longer be attributed to the new tenant.

What does all of this mean?  The property condition checklist is vital to your financial security as a landlord.  Without having a completed and signed property condition checklist upon move-in, the landlord [could have difficulty collecting or withholding funds from a security deposit.] Also, any damages (even those you know were caused by the tenant) cannot be attributed to the tenant and charged to their deposit without the checklist completed upon move-in.

The checklist serves as a statement specifically describing the condition and cleanliness of or existing damages to the premises and furnishings including, but not limited to walls, floors, countertops, carpets, drapes, furniture and appliances and should be provided by the landlord to the tenant at the commencement of the tenancy.  The checklist should be signed and dated by the landlord and the tenant and the tenant should be provided with a copy.   

Pictures are Worth a Thousand Words

Filling out the property condition checklist prior to move-in must be done with the tenant present.  Any defects visible at the time of the move-in inspection should be noted so that pre-existing damages or defects are not wrongly attributed to the new tenant.  Pictures and/or video are also very handy should you find yourself in a situation down the line where you need to prove the condition of your property.

Because this report is the basis of determining “wear and tear” versus damages, if something is in new condition, (such as fresh paint) or free of defects, a landlord should note the condition as “new Paint” or “no defects found” on the checklist.

Another consideration for landlords is to list the serial number of each appliance on the checklist.  This assures you that a tenant won’t move out with your good washing machine and leave you with something 20 years old. 

Move-Out

Upon the tenant moving out, the landlord or property manager is expected to do a walk-through of the premises and determine which, if any, damages are beyond normal wear and tear.  Again, photos will come in handy as a good way of showing the “before and after” of the property.  Please note that while a tenant may certainly request to be present for the move-out inspection, you are not obligated to perform the move-out inspection with them present.

If any damages are found to be a result of the tenant’s occupancy, you may charge the mount required for repair to their security deposit.  Any damages which exceed the deposit amount should be pursued through either a small claims court or a collection agency.  (Use AOA’s form #131 – the Move-in, Move-out Checklist.) 

What is an Adverse Action Notice?

By Megan McCormick 

If you process an application for tenancy and based on your criteria for tenant selection, the applicant does not meet the minimum requirements, thus cause you to reject the application OR accept it on a conditional basis, you are taking what is called “adverse action” towards that application.

This means that you ARE REQUIRED to fill-out and provide an Adverse Action Notice, [AOA’s Tenant Rejection Notice – form #140].  The notice explains to the applicant(s) what part of the tenant screening report caused their application to be rejected or accepted conditionally.  It also informs them as to where the information came from and how they can obtain a free copy of that report allowing them to see exactly what derogatory information is on their credit report or background check and what caused the adverse action. 

Important Note:  If you have multiple applicants on one application, you are not allowed to share the information provided on a tenant screening report with anyone.  For this reason, you must issue a separate Adverse Action notice to each applicant.

Providing the Adverse Action notice is part of complying with Federal law.  The Fair Credit Reporting Act (FCRA) addresses the responsibility of the Adverse Action Notice. 

Disclaimer:  The material above does not constitute legal advice, but rather information for your general guidance and help.  There may be other facts which would result in a different interpretation and different results.  If you need legal advice, consult an attorney.

Reprinted with permission of the Rental Housing Association, UPDATE.