The number one source of landlord-tenant disputes is the disposition of the tenant’s security deposit. Many of these potential problems can be resolved with proper procedures BEFORE the tenant takes possession of the rental unit. But to do so, you need to walk through the property with your tenant before move-in and go over the following matters.
Have the Tenant Sign the Checklist
The purpose of the inspection isn’t to find all the items you or your maintenance person forgot to check, because you should have already looked carefully through the unit to ensure it met your high standards. The purpose of the inspection is to clearly demonstrate to the tenant’s satisfaction that the rental unit is in good condition – except for any noted items.
When properly completed and signed, the inspection form clearly documents the condition of the rental property upon acceptance by and move-in of the tenant and serves as a baseline for the entire tenancy. If the tenant withholds rent or tries to break the lease by claiming the unit needs substantial repairs, you may need to be able to prove the condition of the rental unit upon move-in. When the tenant moves out, you’re able to clearly note the items that were damaged or weren’t left clean so that you can charge the maximum allowed under your state or local laws.
Using the Form
The first column is where you can note the condition of the unit before the tenant actually moves in. The last two columns are for use when the tenant moves out and you inspect the unit with her again.
The Move-in / Move-Out Inspection Checklist is unique in that you use the form throughout the entire tenancy – upon initial move-in, during the tenancy and when the tenant finally vacates. Make sure you do the following when having a new tenant sign the form:
Physically walk through the rental unit with your tenant and guide her through the inspection form together. Let the tenant tell you the conditions she observes and make sure your writing of the noted conditions and comments accurately describes everything in detail.
If it is impossible for you to do this walk-through with your tenant, then you should complete it and ask that all adult occupants review and sign the form as soon as possible upon move-in. Inform the tenant that you’ll be glad to deliver her mailbox key after you have the approved form in hand. I’ve learned that the mailbox key is a very important and useful tool in motivating a tenant to promptly review and approve the inspection form. You can’t refuse to give your tenant her mailbox key, but this suggestion is often effective.
Print legibly and be as detailed and specific as possible when noting the condition of each item. Be sure to indicate which items are in new, excellent or very good condition as well as noting any items that are dirty, scratched, broken or in poor condition.
For example, rather than generally indicating that the oven is “broken”, be specific and note that the “built-in timer doesn’t work.” This way, your tenant understands the oven works, but she also knows to use a separate timer and knows she won’t be held responsible for this specific item upon move-out. If the kitchen flooring is new, be sure to indicate that on the form.
Many disputes can be resolved if the inspection checklist specifically notes the condition of each item. If you only comment on dirty or damaged items, a court may conclude that you either didn’t inspect or forgot to record the condition of a component of the rental unit that you’re now claiming was damaged by the tenant. You may think everyone knows and agrees that all items without any notation are in average or “okay” condition, but the tenant will likely tell the court that the item was at least somewhat dirty or damaged and that you shouldn’t be able to collect for it.
Carpet and Flooring
Always note the conditions of the carpets and floor coverings because this is one other most common areas of dispute with tenants upon move-out. Although tenants shouldn’t be charged for ordinary wear and tear, they should pay for the damage if they destroy the carpet. Indicate the age of the carpet and whether it’s been professionally cleaned as part of your rental turnover process. When a tenant leaves after only six months and has destroyed the carpet, you can guarantee she’ll remember the carpet as old, dirty and threadbare. The tenant’s selective memory won’t recall that the carpet was actually brand new or at least in very good condition and professionally cleaned upon her move-in!
If you discover any problems during your inspection walk-through, note them on the inspection form and take steps to have them corrected, unless the corrections aren’t economically feasible. For example, you may have a hairline crack along the edge of the bathroom countertop. If you determine refinishing or replacing the countertop is too costly, just note the condition of the inspection form so that your tenant isn’t erroneously charged upon move-out.
If you repair any items noted, you should then update your inspection form showing the repair and have your tenants initial it.
Mold, Mildew and Pests
Be particularly careful to note any and all mildew, mold, pest or rodent problems. Doing so is important because these are health issues that must be addressed immediately before a tenant takes possession. There’s been a trend toward tenant claims of an uninhabitable rental unit that violates health and safety regulations. These claims often result in requests for rent reduction or even litigation. To prove you turned over the rental property in good condition, affirmatively indicate on the Move-In / Move-Out checklist that no indication of any of these issues exist.
To avoid disputes over security deposits, take digital photos or record the rental unit’s condition on video before the tenant moves in. In addition to your inspection form, you’ll have some photos to help refresh the tenant’s memory or show the court if the matter ends up there. Be sure to include a caption or description with all still photos and provide a running detailed narrative with recordings. If you use a video, try to get the tenant on video stating the date and time or bring a copy of that day’s newspaper and include it in your recording.
Give Your Tenant a Copy
Be sure to give your tenant a copy of the competed and signed form for her records. You should give your tenant copies of all documents, especially the inspection checklist so that the tenant can review her own copy when she moves out if there are charges.
When used properly, your Move-In / Move-Out Checklist not only proves the existence of damage in the rental unit but also pinpoints when the damage occurred. Don’t fall for one of the oldest tenant ploys in the book. Tenants often try to avoid walking the rental unit with you upon move-in because they want to wait and be able to avoid charges for damage that occurs during their actual move-in. You must require your tenant to walk through the rental premises and [sign the form] agreeing that all items are in clean and undamaged condition before she starts moving in her boxes and furnishings.
Robert Griswold is a hands-on property manager with more than 30 years of experience, having managed more than 800 properties representing more than 45,000 rentals. He owns and runs Griswold Real Estate Management, Inc. with offices in southern California and southern Nevada. This article is an excerpt from his book, Property Management for Dummies which is available at www.LandlordBooks.com. For more information, visit www.griswoldremgmt.com