At the end of a tenancy, after the tenant has left, a property manager or landlord has to perform a final inspection of the property.
This inspection is usually known as the final bond inspection. During this inspection, you compare the property’s condition against the original property condition report (the one filled in before the tenant moved into the rental unit).
The final bond inspection provides an opportunity to identify the damage and cleaning concerns that a tenant is obligated to pay for.
If possible, it’s always a good idea to have the tenant accompany the landlord or property manager during the final bond inspection. This minimises the likelihood of misunderstandings and disputes over the property’s condition.
You can schedule the inspection using Lodge’s free self-management software.
Most states and territories require a landlord or property agent to write a list of all the damages or cleaning concerns that an outgoing tenant is responsible for and the cost of fixing them. These costs can be deducted from the rental bond.
Ideally, landlords or property managers should conduct the final bond inspection within 14 days after the move-out date.
Afterwards, prepare a detailed, itemized final property condition report and provide a copy to the tenant.
It’s important that you carry out this inspection thoroughly and write a detailed report, as it is a common area of dispute between tenants and landlords.
Here are some tips that will help you conduct the final bond inspection like a pro.
Use the Property Condition Report
As mentioned above, using the Property Condition Report filled in prior to the tenant moving into the property is a great idea.
Use the property condition report to compare the conditions of each item to the original details. Then discuss issues such as missing items, damage or cleaning concerns with the tenant.
This will help you determine outstanding charges to the tenant, such as:
- Rent arrears
- Outstanding utility bills for water, electricity, or gas
- Cleaning costs (especially if the house was left unclean and requires professional cleaning)
- Cost of replacing missing or irreparably damaged items
- Cost of repairing anything that’s broken
Determining Property Damage
At the end of the tenancy, a landlord is entitled to clean and undamaged property.
However, bear in mind that fair wear and tear are expected and your tenant isn’t responsible for it. Normal use and ageing may affect the condition of your property over time, even without the tenant’s negligence.
Under the Residential Tenancy Act, “fair wear and tear” includes damages such as:
- Loose hinges or handles on cupboard doors
- Light markings and scuffs on walls or appliances
- Faded curtains
- Scuffed up wooden floors
- Faded, cracked, or chipped paint
- Wear marks on carpets (especially in high-traffic areas)
- Water stains on the carpet or ceiling from a leaking roof
- Work kitchen countertops
These minor damages and repairs are usually the landlord’s responsibility. However, tenants are expected to compensate you for any wilful or neglectful damage to the property.
You can charge a tenant for damages such as:
- Missing curtains or tears caused by children or pets
- Badly scratched or gouged wooden floors
- Unapproved, poor-quality paint jobs
- Broken windows or glass on cabinets
- Burn marks on carpets
- Holes in the walls from nails or picture hooks
How to Cost Repairs and Cleaning
Unless a tenant has wreaked total havoc on the property, determining the cost of damages can be a tricky affair.
Generally, if the damage can be reasonably fixed, you should only charge the cost of the repairs.
However, severe damage to the property, such as a burn or permanent stain marks on carpets, might require replacement of the item with one of similar quality.
Assessing property damage will depend on factors such as the age of the property and the size and location of the damage.
Where possible, you can negotiate the amount to be deducted from the bond to cover damages with the tenant.
What if the repairs cost more than the bond amount?
In cases where the damage caused by a tenant exceeds the bond amount, the tenant must top up the remaining amount.
In the case of any disputes, the property owner or manager can apply to their territory’s Tribunal for a decision.
Increase your cashflow by self-managing your property.
Keep Everything Civil
To make the process as smooth as possible, make an effort to come to an agreement with the vacating tenants regarding deductions from the security bond.
If the two of you don’t agree, try to compromise. If that doesn’t work, the dispute can be resolved through your state’s Magistrate’s Court.
Before returning the bond, make sure the tenant has handed over all sets of keys given to them at the beginning of the tenancy.
To make sure they are the right keys, you can compare them with the ones pictured on the property condition report or by physically trying them out.
Note that all keys, including any extra keys the tenant had cut for themselves, should be returned. This ensures the security and privacy of the next tenant. However, you can opt to change all the locks before the next tenant moves in.
If the tenant fails to return keys, you can charge them for the cost of changing locks (or even the rent if they left the property locked, until the keys are returned).
When the tenant has moved out and you’ve addressed the repair and cleaning concerns, take pictures of the property and advertise it to potential tenants.
The sooner you can attract a high-quality tenant, the better. Every day your rental property stays vacant is potential income lost to you.
Join thousands of smart landlords and property managers who privately list their rental property on Australia’s leading property site Lodge.
This will significantly improve the likelihood of attracting a high-quality, reliable tenant to your vacant property.