Do you understand your rights and obligations when it comes to a final property inspection? Here’s how to avoid disputes and potentially save money and time.
What is a final property inspection?
A final inspection is what you carry out once your tenant has ended their tenancy and delivered a vacant property. An important part of this process is comparing the condition of the property against the original Property Condition Report.
The Property Condition Report, or PCR, is a report you and your tenant both carry out before they move into the property. It’s a comprehensive document that details your property’s condition, along with any damages present before the tenant moves in.
In short, a PCR is a detailed list of every item within a property. This includes fixtures and fittings, cupboards, windows, doors, included kitchen appliances and furniture, and their condition. This document is normally supported by photographs and provides you with tangible evidence of the exact contents and condition of a property when a tenant first moves in.
If you’re self-managing, ensure you carry the final report out thoroughly as it’s a common area of dispute for tenants. Where possible, you must give your tenant a reasonable opportunity to be present for this final inspection and to arrange for the return of the keys.
The final inspection: A bit of theory
As a landlord, you have to uphold several responsibilities. Of course, as with most things in the property management industry, there is state and territory-specific legislation to protect your rights and your tenant’s rights.
How to check the Property Condition Report
During the final inspection, carefully tick off every item in the house against the PCR list. It’s a great idea to use a rental property management agency for this purpose to make the job easier, but many landlords will choose to do this themselves.
To properly conduct a PCR check, you should inspect the property room by room. Take notes and photographs, while checking things such as the integrity of the floor, walls and ceiling, looking for any surface damage or stains.
You should compare the state of the property against the photographs attached to the PCR list created when the tenant first moved in.
Property damage vs Fair wear and tear
You’re entitled to have your property returned to you in a clean and undamaged condition at the end of a tenancy. There is, however, a difference between deliberate damage caused by recklessness and neglect and fair wear and tear. Your tenant is not responsible for fair wear and tear on your property.
Normal wear and tear is different to damage caused by tenants. Normal wear and tear occur naturally over time, but damage is the result of negligence, carelessness or abuse. For example, a carpet that has faded due to sunlight exposure classes as fair wear and tear, whereas food and drink stains on a carpet would be considered tenant-caused damage. You can use your tenant’s rental bond to pay for repairs necessary due to damage.
How do I calculate fair wear and tear?
This step can be challenging for landlords. Take into consideration factors such as the length of a tenancy, as well as the age of the property, which can naturally impact the condition of the property. Most items have a seven-year depreciation lifespan schedule when it comes to residential tenancy matters. There are many different scenarios you can encounter, but it’s always best to discuss them with your property manager who will best be able to guide you.
Who should attend the final inspection?
It is both with your rights (and obligations) and the right of your tenant to attend the final inspection. Ideally, try to arrange a time that works for both of you to do the inspection together. This date should take place after the tenant moves their belongings out and has finished cleaning the property.
If your tenant can’t attend the final walkthrough, take as many photos as possible and send them to the tenant (along with any notes) if any issues become apparent. This will help to ensure there’s no conflict.
What to look for at the final inspection
- Aircon & heating: Check the aircon and heating during the final walkthrough. All sources should be working without issue. If air conditioning goes out of order due to fair wear and tear, it’s your responsibility to replace it and cover the costs.
- Ceiling & walls: Check them for water damage, peeing paint or wallpaper, cracks or stains. Walls can often be left with nail holes.
- Cleaning: All rooms should be evidently clean with no litter or debris. Cabinets and closest must have been emptied and the walls, ceilings and floors wiped, while all lights and fixtures should be in working order.
- Doors & locks: Just like windows, doors should open and close smoothly. Check that knobs, bells, locks and other security systems work effectively.
- Electricity: Check plug sockets, ceiling and exhaust fans and the circuit breaker. All light switches should be turned on and off to ensure they’re working. Outlets can be quickly tested by plugging in a phone to see if it charges or not.
- Flooring & carpets: Look at the flooring for discolourations on wood or carpet.
- Furniture & mirrors: Included furnishings should be left clean and in the same condition as they were when the tenants first moved in, save for normal wear and tear.
- Garage: If your property has a garage, check that the doors and remote work, opening and closing easily.
- Garden: A garden can often get overlooked when you’re busy checking the property’s interior. Any outdoor areas should be left reasonably clear with no shed tools or garden furniture left behind.
- Utensils: Any included utensils that were listed as part of the PCR should all be there during the inspection. It’s time-consuming, but you should take the time to count everything and compare it against your inventory.
- Water: Test any water fixtures during the inspection. Faucets should turn on smoothly and have both hot and cold water. Toilets should flush properly and there should be no leaks.
- Windows & blinds: Make sure all windows and blinds are functional. Windows should open smoothly and any screens or blinds should work as intended.
Be attentive, but civil and fair
Where possible, make every effort to agree with your vacating tenant on deductions from their rental bond. If you cannot agree, try to compromise. If this still doesn’t go to plan, the bond disposal will need to be resolved in your state Magistrate’s Court.
Return of the keys
At the end of the tenancy, your tenant is responsible for returning all sets of keys provided to them. If they don’t return the keys, you can hold them accountable for the cost of changing the locks or charge them rent until the keys are returned.