Jax Kneppers, creator of digital inventory platform Imfuna Let, discusses the role that technology has to play in the lettings space

This time last year we surveyed landlords and letting agents, asking them a series of questions about technology. The study returned some interesting results; not least that only 11 per cent were planning on investing in new technology in the 12 months that followed and that 67 per cent admitted that they do not use devices such as smartphones or tablet computers. When you compare this to other industries many of whom have embraced technology wholesale and have been using it for some time to improve the way they do business, it could be said that the lettings industry was lagging behind.

One key factor behind this apparent reticence towards adopting technology is the existence of decades old processes – particularly where inventories are concerned. For many years the industry has relied on the paper-based approach to conducting inventories; simply because it was the way it was done and there was no alternative. Today however, as the paper-based inventory becomes increasingly outmoded, there is an alternative and many landlords and letting agents are waking up to its benefits.

What’s wrong with the old system?

There are many shortcomings to the paper-based inventory. So many so that the Association of Independent Inventory Clerks (AIIC) recently cited that ‘many inventories are completely inadequate’ and ‘not worth the paper they are written on’.

Simon Smith owns Kent-based property management company KS Property Rentals, and until fairly recently his standard inventory process consisted of a hand-written multipage A4 document, which would have to be scanned or retyped onto the computer should the landlord request an electronic version.

In addition Simon’s team would take photos in every room to gain a contextual overview of a property. These photos would also have to be loaded onto a hard drive, then renamed to identify maintenance issues in shot and would rarely be married with the actual inventory report. Simon comments, “If I wanted to email an inspection report to a landlord with photos, I would expect to be on-site for an hour, followed by 30 minutes after hours writing reports into a digital format, 15 minutes on a summary email and another 15 minutes to transfer, file and save the photos. With up to 60 reports to process and compile every month, it was a considerable time investment.

“The most frustrating aspect of the old system was spending evenings writing up reports and not being able to offer the client a polished finished product that would meet the requirements of the DPS (Deposit Protection Schemes). There was a lack of continuity – following the thread of the reports was an onerous task.”

By digitising those same processes Simon has been able to make significant time savings – reducing the time spent on check in and check out by 75 per cent. Not only has he been able to drive cost savings straight back into the bottom line as a result, he also now has a more professional, branded output to offer to tenants.

Dispute resolution

We recently conducted another survey, this time asking landlords for their thoughts on the Tenancy Deposit Schemes. The findings revealed mixed emotions from landlords in regard to the Schemes; 38 per cent said they were effective in minimising conflict between landlord and tenant, while 34 per cent said they were ineffective; the remainder were ambiguous. We spoke to Mary Latham, an NLA trainer and speaker with more than 40 years of experience as a landlord, and asked for her view on the statistics:

“Tenancy Deposit Protection legislation came about because tenants didn’t feel landlords were always fair when reclaiming for losses or damages. Those few landlords who, for many years, saw the tenants’ deposit as a way of maintaining their properties to the original standard caused these issues. Most landlords, who are fair, have no problems with this legislation but there will always be those who don’t understand that the deposit is the tenants’ money and is meant to cover losses and damages over and above normal wear and tear. Landlords who have unrealistic expectations will inevitably find this legislation onerous; the onus of proof lies with the landlord and this is why a solid inventory is key to a successful claim.”

Mary makes a good point. On the surface, landlords appear to be grappling with the deposit dispute process. The fact is however that it’s the current inventory system which is unhelpful and is failing to support landlords who are entering into disputes with a scarcity of robust evidence to support their case.

The burden of proof

To find a burden of proof compelling an adjudicator will consider a combination of factors: expert knowledge, a solid approach and detailed supporting information.

When preparing a move-in or move-out report, it is fundamental that the data collection processes used are reliable, transparent and robust. Any adjudicator will ultimately use this as a basis for judging whether the data is objective, repeatable, and consistent with industry practice. And this is where the digital inventory has a significant role to play.

An inventory should include a schedule of conditions with photographs and landlord / tenant comments to corroborate and it should be signed and dated by all parties. This can dramatically increase the chances of a favourable outcome at dispute, but is unfortunately not easily supported by the paper-based inventory.

Utilising the available tech to capture the condition of a property in an organised fashion and in turn save that data in a secure server eliminates the many steps involved in the more traditional paper based data collection system. And therefore reduces the likelihood of one of those steps becoming a weak link in a dispute.

More importantly, the data can be accessed at any time from any location and can be configured to capture the condition of the property at a specific point in time, tracking the events during the course of the tenancy and enabling comparisons in the condition of the property to establish any changes. Subsequently sharing this data with all parties during the course of the tenancy eliminates potential areas for dispute.

Eddie Hooker, CEO of My Deposits, an approved Tenancy Deposit Scheme has the following to say on the subject:

“I would say that the inventory is now one of the most important documents a landlord of tenant can supply when they end up in a dispute over the return of a deposit. It’s about creating a story and a landlord putting his case to an adjudicator, and a well put together inventory will point the adjudicator in the right direction.

“The law changes of the 6th April make it a lot more black & white; the deposit has to be protected after 30 days. If it isn’t protected, then there can be quite severe penalties for the landlord and his letting agent.

“Accessibility to inventory management is probably the key [after the April 6th ruling]. With the advent of digital inventories, imbedding the photographs within the inventory and being able to show the tenant what the inventory looks like much more quickly will all help the inventory to improve – it’s about raising standards. It’s about raising standards – we’re in a professional industry and digital inventories demonstrate that landlords and letting agents are working in a much more professional way.”

The future

Innovation in the consumer market is driving innovation in the business market; with exciting developments in IT appearing in the hands of consumers first before making their way into other arenas – a process known as ‘consumerisation’. Today, just as there are countless apps to while away a business journey on the train, there are just as many that can improve the productivity of that same journey.

Meanwhile the new generation of ‘digital native’ workers, who have grown up using Facebook, mobile apps and other technological innovations, have become accustomed to having powerful yet easy-to-use technologies at their fingertips. And that generation will expect the same in their working environments too.

Over year since that original survey, which revealed an industry seemingly unwilling and unfussed about adopting technology in any meaningful way, we have seen many begin to see the light, and realise that digitising existing work practices will save time and money, and the humble inventory report is no exception. Using technology for the inventory process is a more efficient model all-round, and will eventually confine the traditional paper-based approach to the recycling bin.

By automating the inventory process, more time is available to invest in more strategic activity, ultimately growing a business. Technology can also improve client services, speed up the entire reporting process, improve productivity, and reinforce brand identity. And when you add into the mix the ability to first reduce the number of disputes that occur, and second, increase the number that do go in the landlord’s favour should a dispute be unavoidable, you have to ask; is now the time to tech action?