Dear Diary – 01/23/16: Rental Property Inspections

Happy Landlord_Happy Tenant_FinalHappy Landlord, Happy Tenants – It can be done!

When did I last “formally” inspect my property? At move-in/move-out!  Research recommends 4 types of inspections for rental properties.  These can be spread out so that they fall at the beginning, the end, and during the term of the lease.

SUMMARY INSPECTIONS THAT I HAVE BUILT INTO MY BUSINESS PLAN:

  • Inspection #1: Month 0 (day 1 of Lease) – Move-in Inspection. Inspection completed after tenants move in. Use Move-in checklist to document condition of unit at move-in. Photo documentation is recommended where there is question. Never a bad idea for Landlord/Property Manager to do a pre-inspection of the unit to have their own documentation to compare with what tenant provides. That being said, if a Move-out inspection was done then that should suffice , unless someone (sub-contractors) were in the unit since move-out, in which case a quick check never hurts to ensure that the property is move-in ready.
  • Inspection #2 : Month 4 into Lease (or as close to this as possible when schedule allows)– Routine Safe and Clean Inspection
  • Inspection #3 : Month 8 into Lease (or as close to this as possible when schedule allows) – Routine Safe and Clean Inspection
  • Inspection #4: Month 12 into Lease – Move-out Inspection: Inspection completed on the day of tenant move out. Landlord/Property Manager completes inspection together with tenant to determine condition of property at end of lease term. Use Move-in checklist for comparison.

Written and photo documentation recommended for all inspections. Signatures (Tenants & Landlord/Property Manager) are a must if one intends on making this a contractual document.  Copies of signed documents with any attachments (ex. print out of photo documentations) should be given to all parties involved.  So, just when is my next inspection? Friday 2/12/16!

A little more about what to expect from each inspection:

  • Move-In Inspection: “inspection not intended as a wish list for things the tenant’s want done to the property”. Check to see that property is move-in ready and do own inspection for comparison with what tenants reports back. I currently allow 48 – 72-hours of move-in for tenants to complete and return move-in checklist with attached photo documentation of any issues ex. Previous holes in the wall, stains on wall/carpet etc.
  • Routine Safe and Clean Inspections: Inspection intended to ensure the property is safe and clean. Research shows these types of inspections should be conducted every 3 – 6 months. For my property I have opted to do this every 4 months so that overall I have 4 inspections completed over a 12 month lease to allow for items to be addressed sooner rather than later.
    • What am I looking for with these types of inspections?                                                                                                                                                                  Tenant’s Responsibility:
    • Issues caused by tenants (ex. doors pulled off hinges) or
    • Unauthorized alterations to property (ex. Unauthorized changes to locks, unauthorized painting of walls, defacing any part of the premises, installing or removing any existing alarm systems). I will at times allow some flexibility on this if the alteration does little harm/damage to property and actually adds equity to the home. However that being said, tenants are encouraged to seek prior written consent prior to making any alterations to the premises and this requirement is included in the terms of the lease.                                                                                                                            Landlord/Property Manager’s Responsibility:
    • Items that I as Property Manager would be responsible for ex. leaking faucet.

Then what? Follow-up Inspection:  This will be scheduled in the event that an issue was discovered during the routine safe and clean inspection.  The purpose of this is to verify that the tenant has corrected the issues they are responsible for and for my part I get moving on issues that I need to address, prioritizing and beginning by addressing issues that cannot/should not wait.

  • Drive-by Inspections: for my part, I use these to primarily focus on curb appeal and external inspection of the property. I will often schedule these at the same time as the routine safe and clean inspections just to save myself time and schedule follow-ups with tenants accordingly.
  • Move-Out Inspection: I will often schedule this inspection at the time that the tenant is ready to hand over the keys to the unit and my preference is to have these inspections performed with tenant on premises. Some will opt to do this type inspection Landlord/property Manager only after receiving the keys from the tenants. However I tend to agree with reports that encourage one to do this inspection, “with the tenant on property on their last day on premises as specified in the lease agreement or extended accordingly”. This prevents the tenant denying everything that you find during the move-out inspection should you conduct this on your own after they have locked up and already handed over the keys. Reports suggest to have tenants date and initial by each inspection finding and sign the completed move-out inspection form prior to them leaving the premises. However, tenants may decline to sign believing that if they don’t sign they won’t be responsible, so this is where you camera becomes your BFF! Pictures don’t lie and tenants would have a tough time contesting this in court.

The above are all tips I have found to be great in helping ensure that I first and foremost help my tenants keep the property in good condition at all times. The ideal situation is to help them, help me so that I am not forced into having to dip into their security deposit.  I have, however taken the steps to ensure that should that happen, then I know how best to defend my security deposit decisions.

“Landlords may make deductions from a tenant’s security deposit, provided they do it correctly and for an allowable reason. Many states require landlords to provide a written itemized accounting of deductions for unpaid rent and for repairs for damages and necessary cleaning that exceed normal wear and tear, together with payment for any deposit balance.”

As a newbie landlord, I make an effort to educate myself on the Colorado Laws as pertains to itemizing and returning tenant’s security deposits. For my leases a period of no more than 60 days is provided for written itemization and statement of how the deposit has been/will be applied toward back rent and/or costs of cleaning, damage repair as well as whatever is left of the deposit.  Happy Learning!

References:

https://www.biggerpockets.com/renewsblog/2011/11/04/importance-rental-property-inspections/                                        http://www.nolo.com/legal-encyclopedia/colorado-landlords-guide-security-deposit-disputes-small-claims-court.html                                                                            http://www.nolo.com/legal-encyclopedia/colorado-security-deposits-36200.html

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