Time to say goodbye
How to end a tenancy
It is not uncommon for a tenancy to not continue for various reasons, and landlords may find even themselves in a position where they wish to end it early.
As a general rule, landlords need to give their tenants a minimum of 90 days' notice, which must be delivered officially, in written format. For a fixed-term tenancy agreements, between 21 and 90 days before the end of the fixed term, a landlord can give notice to say that they do not wish to continue the tenancy after the end date.
When the parties have a cooperative landlord-tenant relationship, they can mutually agree to end a tenancy early, in both a fixed-term or periodic agreement.
For advice on particularly difficult tenancies, it is best to consult with a professional property manager for the best course of action.
Difficulties faced when a tenant is leaving
Some common problems that landlords face when tenants are leaving are:
- Bond refund issues: Disputes can often arise between tenant-landlord when deductions have to be made from the tenant’s bond for cleaning fees or repairs.
- Failure of payment of past-due water bills: If a landlord neglects to monitor the payment of water bills that are in the tenant’s name before they leave, they may find themselves stuck with unpaid bills.
- Abandoned personal property: When tenants skip move-out inspections, landlords can find themselves with abandoned personal property that they must figure out a way to dispose of, which often strains a landlord-tenant relationship.
The final inspection: a bit of theory
The inventory/chattels list: what it is
An inventory/chattels list is a detailed list of every item within a property, which includes fixtures and fittings, cupboards, windows, doors, kitchen appliances, and furniture, and its condition.
This is a particularly important document that is often supported by photographs and which provides landlords with tangible evidence of the exact contents and condition of the property when a tenant first moves in.
How to check chattels
During the final inspection, a landlord must carefully tick off every item in the house against their chattels list. While it is possible to use a rental property management company for this purpose, which makes the job a lot easier, a lot of landlords choose to do it themselves.
In order to properly conduct the chattels check, landlords should inspect the property room by room. They should take notes and photographs, while checking things such as the integrity of the walls, ceiling, and floors, looking for any surface damage and stains. Landlords should compare the state of the property to the photographs attached to the chattels list created when the tenant first moved in.
Fair wear and tear
The term “fair wear and tear” refers to the unavoidable damage that happens through regular, day-to-day use of a property. A worn carpet from being walked on is a perfect example of normal wear and tear. A landlord cannot claim compensation from the tenant for anything that constitutes wear and tear. To avoid disputes on that, it is advisable for landlords to clearly have it stated in the lease agreement.
Wear and tear vs. damage: is there a difference?
Normal wear and tear is different than damage caused by tenants. While normal wear and tear occurs naturally over time, damage is a result of negligence, carelessness, or abuse. A carpet that has faded due to sunlight exposure would classify as wear and tear, whereas food and drink stains on a carpet are considered tenant-caused damage.
Landlords can use the tenants’ security deposit to pay for repairs necessary due to damage.
Calculating fair wear and tear
Calculating fair wear and tear can sometimes be challenging for landlords. Landlords should always try to do some research online for case studies that match their own situation in order to determine what is suitable to dispute and what is not.
When assessing wear and tear, landlords should take into consideration factors such as the length of the tenancy as well as the age of the property, which naturally impacts the condition of the property. Using the apportionment technique, which works by assigning a monetary value to items in the property, can be useful for landlords going through what can sometimes be a subjective process.
The final inspection: practice
The final inspection: Who should attend?
It is both within landlord rights (and obligations) and the right of a tenant to attend the final inspection. Ideally, the landlord and tenant should arrange a time that works for both of them in order to do the final property inspection together. It should take place after the tenant has moved all their belongings out and finished cleaning the property.
If a tenant cannot attend the final walkthrough, landlords should 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 is no landlord-tenant conflict.
What to look for in a final walkthrough
1. Ceiling & Walls
The ceilings of a property can often be forgotten, but it is important that landlords check them for signs of water damage during a final inspection.
The walls should also be examined for peeling paint or wallpaper, cracks or stains. Walls can often be left with nail holes and discoloration once the tenants have removed their hanging decoration and electrical fixtures or appliances.
2. Flooring & Carpets
Landlords should look at the property’s flooring for discolorations on wood or carpet. It is important to move furniture out of the way to allow any damage or fading to show properly.
3. Windows & Blinds
During the final inspection, landlords should make sure all of the property’s windows and blinds are functional. Windows should open smoothly and any screens or blinds should work as intended.
4. Doors & Locks
Doors, just like windows, should open and close smoothly and landlords should verify that knobs, bells, locks, and other security systems work effectively.
5. Furniture & Mirrors
Furniture that is listed as part of the property’s inventory, which can include items large or small, from mirrors to paintings and sofas, should be clean and in the same condition that it was in when the tenants first moved in, save for normal wear and tear.
Dealing with tenants who leave their furniture behind
An unfortunately frequent occurrence that landlords have to deal with is when tenants leave their personal furniture and other possessions behind. Even if landlords do not have the storage for them, they are obliged by law to notify tenants that they are holding onto it until it is reclaimed.
If a tenant is unresponsive or fails to remove their items, landlords are entitled to dispose of the property as they see fit, i.e. by selling, donating, throwing it away, or keeping it.
During the final inspection, landlords should ensure that everything is in order with the electricity in their property by checking plug sockets, ceiling and exhaust fans, and the circuit breaker. All light switches should be turned on and off to ensure they are working and outlets can be easily tested by plugging in a phone to see if it is charging or not.
All of the property’s water fixtures should be tested by landlords during the final inspection. This includes all sinks and faucets, the toilet, the bath, shower, and even the toilet bowl, along with any irrigation systems. Landlords should ensure faucets turn on smoothly and have both hot and cold water. Toilets should flush properly and there should be no leaks.
8. Large & Small Household Appliances
Landlords should deal with large and small household appliances the same way as with furniture. Household appliances that come with the property and are listed in the inventory should all be there during the final inspection. The appliances should be clean and in good condition, save for normal wear and tear, and they should be tested.
Any utensils that are listed in the chattels list as part of the property should also all be there during the final inspection. Even though it is time-consuming, landlords should take the time to properly count everything carefully to compare it against their inventory.
No matter the weather outside, landlords should test out the heating during the final walkthrough. All heating sources should be working properly with no problems.
11. Air Conditioner
Landlords are not required by law to provide air conditioning. However, air conditioning is generally considered by tenants to be a useful amenity, especially during the hot season.
If air conditioning goes out of order due to wear and tear, it is the landlord’s responsibility to fix or to replace it and to cover the costs. However, if the damage has been caused by the tenant’s neglectful behavior, then the tenant can either directly pay the service technician, or the corresponding sum gets deducted from the security deposit.
12. Food rests & Garbage
It is a good idea for landlords to check that the garbage disposal unit is working while inspecting the property – something which can be easily overlooked.
If the property has a garage, landlords should ensure its doors (and remote, if there is one) work, opening and closing easily.
The yard or garden is another area that can sometimes be overlooked when landlords find themselves busy checking a property’s interior. Any outdoor areas that come with property should be reasonably clear, with no shed tools or garden furniture left behind.
When landlords visit their property for the final walkthrough, all rooms should be evidently clean with no litter or debris. Cabinets and closets must have been emptied and the walls, ceilings, and floors wiped, while light and other fixtures should be in working order.
The final cleaning: Whose responsibility is it?
End of tenancy cleaning is a regularly disputed issue, albeit one that can be effectively solved by clear stipulations in the lease agreement. Tenants who are leaving must return a clean property to the landlord. It is up to and within the tenants’ rights if they choose to either do their own cleaning or use a cleaning service, but the expectation is for the landlord to receive the property in the condition it was handed in to the tenant.
A landlord can charge a tenant cleaning fees if the property has not been left in a hygienic state.
Charging for cleaning
One of the most common deductions from the security deposit by landlords is for cleaning when a tenant moves out. The amount that landlords charge for cleaning depends on the condition of the unit, as well as the size of the property, but generally ranges from $200 to $500. Additional services, such as carpet cleaning, are charged extra and not covered by a regular cleaning fee.
Be attentive and fair!
Tenants moving out from rental properties can be a time-consuming process for landlords, who must be prepared to do a final walk-through and inspection to assess the condition of the property and check for any damages. Landlords should aim to do the final inspection together with their tenants, so as to discuss any issues on the spot and avoid potential disputes.
Both parties should have copies of the chattels and inspection checklist during the final walk-through and be very meticulous in examining items while moving from room to room. Landlords should carefully check everything from the water fixtures to the condition of the yard, in order to determine if tenants will have to incur any costs for repairs or cleaning as necessary that will be deducted from their security deposit.
Since there is certainly a lot to ending a tenancy, landlords can make their lives easier by enlisting the help of a property rental management company. Don’t just ask yourself “What does a property management company do?” If you are looking for advice regarding the end of tenancies and how to deal with a tenant moving out or other property maintenance information, a CGPM property manager will be more than help. With multi-year expertise in the property rental management field and a long string of successful relationships with satisfied clients, CGPM can help you optimize your experience as a landlord while at the same time saving you time and money!