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VOLUME IXRental Inspections: Don’t Wait Until Move-Outs Only By Melanie Green There are two primary types of property inspections. One is the move-in/move-out inspection that takes place when a tenant first moves into the property or vacates it. The other is a periodic inspection that takes place at a scheduled point during the tenant’s occupancy or during lease renewal.
Both types of property inspections are important aspects of managing a rental property. By better understanding what to look for during inspections and how often to schedule them, it is possible for landlords to avoid common mistakes.
Purpose of Move-In/Move-Out Inspections Move-in and move-out inspections fully document and assess the condition of the property to determine how much of the security deposit to release to the tenant. This walk-through also confirms whether that security deposit will be used for property repairs.
A move-in inspection should consist of carefully documenting the condition of the property before a new tenant occupies it. By taking pictures of every square foot of the property, landlords create a record of what was already damaged. In the event that new damage is found during the move-out inspection at a later date, these prior photographs serve as evidence that the tenant is responsible for the damage.
During a move-out inspection, it is equally important to document the condition of the entire unit. This may prevent security deposit disputes. If a handyman or contractor is required to complete the repairs, the photos can be sent to service providers to get more accurate price quotes.
“Move-in and move-out inspections save landlords money by preventing legal action and the hassle associated with going to court,” according to Phil Owen, the CEO of OnSightPROS, a company that specializes in objective, third-party property inspection reports in Alabama, Colorado, Florida, Georgia, North Carolina, Pennsylvania, Tennessee, Texas, Utah and Virginia. “It can be a nightmare when people have to bicker about security deposits.”
Move-in and move-out inspections also protect both landlords and tenants, while promoting accountability and fairness throughout the process. Tenants should not be held accountable for what was already damaged. However, landlords should not have to pay for damage that is the tenant’s responsibility.
Goals of Periodic Landlord Inspections The move-in and move-out inspection process is a natural part of lease agreements. To release the security deposit, the property must be inspected. Periodic landlord inspections often take place every six months or at lease renewal, depending on what the lease specifies.
Periodic landlord inspections have different goals than other types of inspections. It allows landlords to check in on tenants during the course of their occupancy. Some of the goals for periodic landlord inspections include:
Ensure the Tenant Complies With Lease Terms A periodic inspection can help to ensure that the tenants do what they agreed to do on the lease. This may include:
Changing air filters
Replacing dead smoke detector batteries and detectors older than 10 years
Looking for lint left behind in the clothes dryer (The U.S. Fire Administration confirmed that there were 2,900 home clothes dryer fires reported annually, which led to five deaths, 100 injuries and $35 million in property loss between 2008 to 2010.)
Assessing the dishwasher for standing water
Identifying liability concerns such as ziplines, trampolines and above-ground swimming pools
If the landlord is responsible for changing the air filter, the periodic inspection is a natural time to do so.
“Replacing the HVAC filter every six months is worth the trip for the inspection,” said Owen. “It saves time and money by extending the life and function of the HVAC system.”
Identify Lease Violations Landlords can look for signs of potential lease violations during periodic inspections. Potential violations to look for are:
Smoking inside unit
Identifying these lease violations can help to stop behaviors early, especially when timeliness might be a factor. For instance, when tenants have a pet that they’re not allowed to have per lease terms, the sooner the pet can be removed from the property, the less likely the pet will have a chance to damage it.
Look For Unreported or Unnoticed Maintenance or Liability Issues What concerns landlords may not be what alarms tenants. Sometimes a tenant will not report or notice the signs of a maintenance or liability issue. Without a periodic inspection, the issue could escalate into a more expensive or destructive one. For instance, noticing a small water spot on the roof could limit the larger impacts of water damage and mold.
“Generally, our inspectors won’t check wall outlets, stoves and fuse boxes during a periodic inspection,” said Owen. “Tenants will call their landlord to fix these things because it’s the landlord’s responsibility. In a periodic inspection, it’s key to look for things that tenants won’t report or try to hide.”
There are maintenance and liability issues that are more costly to take care of later. Replacing an HVAC filter is cheaper than replacing an entire HVAC system. Mold requires less remediation than if it had time to spread. Timeliness is important when it comes to catching property repairs and maintenance issues before it escalates.
Invest In an Inexpensive Body Camera The rules for how much notice landlords must give tenants and whether the tenants must be present vary by state. In Florida, Statute Ann. § 83.53 allows landlords to enter the property with a reasonable wait time of at least 12 hours’ notice to the tenant, unless it’s an emergency or if the tenant has been absent for half of the time between rent payments.
In Texas, landlords should follow the provisions outlined in the lease agreement. Therefore, periodic inspections and the notice requirements must be included in the lease terms.
While the laws vary, tenants could feel uncomfortable about someone entering their living space, whether they’re home or not.
“Invest in a body cam if you go into the property without the tenant present,” said Owen. “They’re inexpensive and you can have it running the whole time to demonstrate integrity throughout the whole process.”
In the event that the tenant claims that something goes missing, there is a video that proves that the landlord didn’t do it.
Benefits of Having a Property Manager According to Owen, “Having a property manager can improve accountability and lessen the risk of property destruction.”
“While owners of investment properties or large multi-unit rentals are more likely to have property managers, all landlords can benefit from having a property manager or third-party inspector who can keep a close eye on the property,” he continued.
Just having someone that continues to keep in touch with the tenants throughout the course of the lease and to properly document the condition of the property can create a sense of transparency and responsibility.
Be Up Front About Periodic Inspections in the Lease It is better to let tenants know that they’ll have periodic inspections in the lease before they sign it. Knowing that someone will be checking on them regularly changes the way they care for the property. Owen notes that periodic inspections can reduce the chance of possible criminal activity on the property as “criminals often look for absentee landlords.”
Use Inspections as an Opportunity Inspections can be used as an opportunity to provide excellent service, take care of small tasks and avoid having to schedule a maintenance company to come back out for simple things.
“Landlords can carry cut-to-fit air filters, wireless smoke alarms, door stops and wall protector plates,” said Owen. “Replace these simple items during the inspection.”
This is faster and more cost-effective than adding these common tasks to a to-do list.
Inspections can help to identify potential problems with a property before they escalate, as well as provide accountability and protections for tenants and landlords. Property owners shouldn’t want to risk making it worse by waiting until the end of a lease term to find that the security deposit isn’t enough to cover the damages. Not only would it be tedious to go after tenants for extra money, but it may prove impossible if said-tenant doesn’t have any assets to cover repairs.
By regularly scheduling inspections (before, after and during a rental lease), this helps all parties involved create a safe and efficient living environment.