31 Jul 2015

Entry Condition Reports. What are they and why do they matter?

An entry condition report documents the condition of a rental property prior to a tenant taking possession of the property.  This acts as evidence  for checking the condition of the property when the tenant moves out. Any changes in the standard or condition of the property during the tenants time in the property will be able to be measured accurately when compared against the entry condition report.

The entry condition report is one of the most important documents a property manager prepares, however some agents prepare reports which have insufficient detail to be helpful when the report is needed. And any lack of detail in an entry condition report can cost a landlord thousands of dollars in unclaimable damage to a property.

When prepared correctly, the entry condition report can save time, money and be a lifeline if a dispute arises over the condition of the property upon a tenant vacating the premises. The report provides the documented evidence needed to win in the small claims tribunal, or QCAT as it is often referred to.

 

The Residential Tenancies Authority suggests that completing an entry condition report is also a good opportunity to carefully check the property prior to a tenant entering the premises.  The inspection would include items such as stairways, decks and verandahs to identify any repair and maintenance issues that need attending to before they become an issue in the future.

It is critical to complete the entry condition report prior to the tenant taking possession of the property. A copy of the report must also be supplied to the tenant along with their tenancy agreement upon taking possession of the property.

The report must detail all items in the premises and it is preferable a property manager is able to indicate all items are in clean, undamaged and working order. If there are any items in poor order it will be very difficult to prove a tenant further damaged the item or left the item in worse condition than it was when they started their tenancy.

Professional property managers encourage owners to present their property in immaculate condition and complete an extremely detailed entry condition report. This way, it is easy to ensure the tenant hands back the property in the same condition it came in. If a tenant agrees with the assessment in the entry condition report they can simply sign off on it.   However if the tenant disagrees with the report they must include explanatory comments within 3 days of being supplied the report.

The agent then has 14 days to provide the tenant with a copy of the final report signed by both parties. If the tenant or agent fails to comply with their responsibilities relating to the report, it is an offence under the Residential Tenancies and Rooming Accommodation Act 2008.

Professional agents send a letter to the tenant acknowledging that they have not returned the entry condition report within three days and then keep this document on file.

If the tenant ammends the entry condition report with concerns, the agent should go back to the property to re-inspect the premises, rectify any issues and invite the tenant to sign a document confirming that the original entry condition report is now correct. If the agent fails to take these measures then the items the tenant has added to the entry condition report confuses the argument about condition when it comes to the end of the tenancy.

Professional agents always take photos to accompany their entry condition report and always include sufficient detail. The documented evidence of photographs should clearly show the condition of the property prior to the tenant taking possession of the property.  If an agent fails to take photos at the commencement of the lease they are placing owners at risk of incurring future costs.

Once the entry condition report has been signed off by the tenant, it must be stored safely. Often a managing agent will do this. If the report is lost, there is potential for disputes over whether damages existed at the start of the tenancy. The entry condition report removes doubt and can be used as evidence for either party.

It is imperative to always complete the entry condition report. The report seems to many as a simple piece of paper, however a well prepared and well detailed entry condition report can save an owner some serious headaches and thousand of dollars in the future.

 

At Noosa Sales and Property Management we take entry condition reports very seriously.   We ensure our owners properties are handed back in the same condition in which they were given out. If you would like to know more about how our entry condition reporting can save you thousands of dollars and offer you peace of mind please call us.  We are always happy to answer your questions or explain how we can help you manage your investment property better.