UK Landlords Lose £5 Billion Yearly in Unpaid Rent



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Landlords in the UK are out of pocket to the tune of over £5 billion every year because of damage to property and unpaid rent.

Tenants’ rent arrears account for around £900 million in costs annually, while damage to landlords’ property sees them fork out an incredible £4.5 billion. (Source: Access Legal Survey, 2015)

The research also reveals that broken appliances are one of the biggest problems when it comes to property damage. Damage to carpets and

decorating is also prevalent, while cigarette burns remain an issue – despite many rental properties not allowing smoking inside. Over a third of the landlords surveyed also stated lack of cleanliness as a common concern.

According to the latest TDS stats, property damage is the second most common cause of disputes (52%). Historically, many tenant disputes have gone in favour of tenants, as there was simply not enough evidence to support the landlord’s damage claim. Many landlords feel tenants are not held to account when damage is caused and that there is little they can do to protect their property. Furthermore, landlords have a poor record in winning tenant dispute cases.

So, how can landlords protect themselves from costly damage? Firstly, it is so important that landlords carry out background checks on potential new tenants.

Picking the right tenant can save landlords from a long, costly eviction process further down the line. Be thorough in conducting background checks and reference gathering, including bank statements for the past three months, previous landlord references to check the tenant paid rent on time and credit checks, incorporating fraud indicators and employer references. Check identity and proof of current address – ideally tax or insurance documents – and talk at length to a prospective tenant.

Secondly, landlords should make regular interval inspections (at least every three months) to record the condition of the property and arrange repairs for any damage or wear and tear as soon as possible. Normally, visits should be arranged for a convenient time for the tenants and landlords should give at least 24 hours’ notice. However, entry can be made without notice for emergency repairs (e.g. in the case of flooding).

Landlords should ensure that the lease agreement also gives them a reasonable right of access to inspect the state of the property and to provide any agreed services (e.g. cleaning or gardening).

Finally, landlords need to protect themselves at the start, during and at the end of a tenancy agreement, ensuring that there is a professional inventory, check-in and check-out. The best way for landlords to protect their property and avoid a dispute is by ensuring that the condition of the property is fully recorded at the start of the tenancy, with a comprehensive inventory, along with a thorough check-in and check-out report.

What do landlords need to look out for at check-out? The most important focus of a check-out is to make sure the property has been left in the same condition that it was in when the tenant moved in, allowing for reasonable wear and tear. To enable landlords to do this job properly, it is vitally important that they have an inventory; the inventory must be fully detailed and supported by photographs where necessary. A check-out is very much reliant on an efficient check-in process. Without an inventory, a landlord is unlikely to be able to deduct any money from a deposit, as there will be no proof as to what condition the property was in at the beginning of the tenancy.

The most common mistake in inventories is the lack of detail. Often there are not enough appropriate photographs with accompanying description to show the condition of the property and its contents. For example, many landlords fail to record the condition of sinks and bathroom fittings, as well skirting, doors, floor coverings and kitchen units. If an inventory is not a professional and thorough report on the property, it is not worth the paper it is written on.

Inventory reports should note detail on every aspect of damage and its location at the start of a tenancy. Good photographs provide vital evidence and should be of a high quality when printed on A4 or A3 size paper, making any damage clearly visible.

Unless landlords have a water-tight inventory, they are at risk of disputes and expensive repair bills. Our research shows that landlords who have switched from analogue to digital inventories have seen their tenant deposit disputes drop by more than 300% and their success rate at adjudications improve by an average of 75%.

Normal wear and tear is a fact of life with rental properties, just as it would be at home; but if landlords wish to avoid the hassle of disputes over responsibility for damages, they need to prepare a thorough inventory of the condition of the property that details the condition of every item within.

We have designed Imfuna Let to ensure landlords have a bulletproof inventory that records the property check-in condition status. It is the complete digital property inspection system which automates all aspects of the data collection in inventories and mid-term inspections. The software provides a side-by-side comparison report which clearly demonstrates any change in condition of the property, illustrated with date and time stamped photographs. Users can also publish a deposit dispute report, again saving valuable time, meeting deadlines and ensuring that the tenancy deposit protection adjudicator has the information at their fingertips.

Imfuna Let produces an inventory that records property check-in condition status, and can also be used for mid-term property inspections. Imfuna Let is the complete digital property inspection system automating the reporting process, reducing the overall process from property data capture to report generation by up to 75%. Imfuna Let can be used on current Apple or Android devices.

Embrace the ‘Power of Digital’ in 2016

Free Trial at www.imfuna.com/let-uk/.

6 Comments

  1. cipto junaedy says:

    Greetings! Very helpful advice within this article!

    It is the little changes that will make the most important changes.
    Thanks a lot for sharing!

  2. “Great Blogpost! Hi there! This is my first comment here so I just wanted to give a quick shout out_ and tell you I genuinely enjoy reading through your posts. Can you recommend any other blogs/websites/forums that deal with the same topics?”

  3. Proptech Pete says:

    I couldn’t resist commenting. Very well written!

  4. Tracee says:

    This really answered my problem, thank you!

  5. Anonymous says:

    I really like your writing style, superb info. Regards for posting.

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