What is the Check out Inventory Dispute Process?

A check-out inventory protects both landlords and tenants, helping you resolve any disagreements when your tenant’s rental agreement ends.

Not sure if you need one? Read on as we explore the benefits of carrying out a detailed housing inventory and explain how to resolve any disputes that arise.

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What is a property inventory and why is it important?

A property inventory is a detailed report that outlines the condition of a property and its contents at both the start (check-in) and end (check-out) of a tenancy. The report should be detailed and include photos of every room in the house, as well as the garden and the property’s exterior.

The house inventory lists all fixtures and fittings and the state they’re in before and after the tenancy. It includes an evaluation of the furniture, surfaces, electrical goods, carpets and the level of cleanliness. It might also include meter readings and photos of house keys.

While an inventory check isn’t a requirement, it’s highly recommended for the benefit of both landlords and tenants. A detailed check-in and check-out report show whether any substantial changes or damage has occurred during the tenancy. This can help to settle disputes, offering both parties evidence to refer back to.

Haven’t got one for your property yet? Arrange a detailed property inventory report via our dedicated online platform to avoid any potential issues when your current tenant leaves.

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What are the most common reasons for deposit deductions?

It’s a tenant’s responsibility to meet the terms of their rental agreement and leave the property in a similar condition to how it was when they moved in.

In cases where this doesn’t happen, landlords might wish to claim money back from their tenant’s deposit to cover the cost of repairs or replacement items. Here are some common reasons why landlords might make deposit deductions:

  • Outstanding rent or unpaid utility bills
  • Damage to the property or its contents (e.g. holes in the walls, soiled carpets, cigarette burns and broken furniture)
  • Missing items that are owned by the landlord (as outlined in the rental inventory)
  • Lack of maintenance or negligence (e.g. failure to leave the property in a clean and tidy condition or to carry out garden maintenance as listed in the tenancy agreement)
  • Unwanted belongings or food left in the property after the tenant has moved out.

While landlords are fully entitled to claim for the issues listed above, there are also some things that they can’t make deposit deductions for.

What can’t landlords make deductions for?

As outlined in the Housing Act 2004, landlords have a responsibility to make sure their rental property meets health and safety standards. This includes maintaining the structural integrity of the property and keeping utility systems like water, gas and electric in good working order.

As a result, unless the tenant is the direct cause of the damage, landlords can’t claim back money for repairs to things like boilers, pipes, roofs and flooring out of their tenant’s deposit. Similarly, landlords must make allowances for reasonable wear and tear.

When letting a property, you should expect some deterioration of its contents. For example, carpets will become more worn as people walk on them, curtains will fade in the sun and it’s likely that minor scuffs will appear on furniture over time. This all counts as reasonable wear and tear.

Before claiming for any damages, you should consider

  • the length of the tenancy
  • the number of occupants
  • the age of the item
  • and it’s expected life span

You can then check the item’s condition as listed in the initial inventory report before the tenant moved in and compare it to the check-out report to make sure a deduction is valid.

If you don’t have any evidence to back up your claim, the tenant is likely to make a dispute. And when it comes to wear and tear, tenants are often successful in reclaiming their deposit.

How to resolve rental inventory disputes ?

When a tenancy agreement ends, your tenant will naturally want their deposit back. As a landlord, you’ll have 10 days to reply to this request and raise any concerns that could lead to a deposit deduction.

If you find any issues with the property and want to claim out of your tenant’s deposit, you’ll need to outline each problem individually, explain your reasons for the deduction and provide supporting evidence in writing.

Unfortunately, your tenant might not agree with the proposed deduction. This is most common when it comes to grey areas like what constitutes ‘clean’ or ‘wear and tear’. In this case, the tenant and landlord should try to come to a mutual agreement that suits both parties.

If this isn’t possible, tenants have up to 3 months to raise a dispute via their Tenant Deposit Scheme (TDS). During this time, the landlord must pay back the undisputed amount and the remainder will be protected by the TDS until the issue is resolved. Here’s how it works:

The 5-step TDS process

  1. The tenant raises a dispute with their TDS. Both parties must then agree to the free Alternate Dispute Resolution service (ADR). Otherwise, the claim would have to go through the courts, which can lead to expensive legal fees.
  2. The landlord then has 14 days to supply evidence that supports their deductions. This can include a tenancy agreement outlining the tenant’s responsibilities, estimates or receipts for repairs, a rent statement if money is owed and an inventory checklist detailing any changes to the property that occurred during the tenancy.
  3. The tenant then has a chance to respond and submit their own counter-evidence.
  4. The landlord gets one final chance to make a statement in response.
  5. Finally, the case is reviewed by an independent adjudicator and both parties are notified of the result within 28 days. Having said this, a decision is often made in 5-7 days.

Once a conclusion has been reached, the TDS will then release the funds based on the adjudicator’s decision.

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How we help

At Mashroom, we offer a detailed property inventory report to protect both tenants and landlords, as an optional add-on. The report is carried out by an independent clerk to ensure nothing gets missed and that any damage is assessed fairly. It also outlines any recommended deposit deductions for landlords to put forward.

We also have an online platform where tenants and landlords can discuss any issues and try to reach an agreement. This gives you a written record which can be referred back to later and – if need be – we can put you in touch with an impartial adjudicator.

Plus, if your tenant is on the deposit replacement scheme, the Mashroom guarantee ensures that you’re covered for up to 12 weeks’ worth of rent if they fail to pay what they owe. We’ll then recover the funds on your behalf, so that you don’t have to worry about it.

All in all, while check-out inventory disputes are sometimes cause for concern, a detailed check-in and check-out report can make things a whole lot simpler. And, with our help, you’ll have a straightforward way to solve any issues that do arise.

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Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, register.fca.org.uk or by contacting the FCA on 0800 111 6768