Through 2021, we’re taking you through the alphabet of property-related terms, explaining what they are and how they’re relevant to you, as a landlord. This month:
Inventory
This is a document containing all the information and evidence regarding the contents and condition of a property. It is routinely taken at the start and end of a tenancy and protects both the tenant and the landlord against any confusion or disagreement about wear and tear, damage or theft that may have occurred during the tenancy.
Ideally, the inventory should be carried out by an independent professional, who can prepare a detailed condition report with accompanying photos.
Whomever is checking the tenant into the property - whether that’s the inventory clerk, ourselves as your managing agent or the landlord - should go through the inventory with them and then ensure it is signed by both parties. If it is a larger property and/or an extensive inventory, it’s fair to leave it with the tenant for a few days, so they can go through it properly and raise any queries.
At check out, the condition of the property as it stands at the end of the tenancy should be compared with the original check-in inventory. If possible, the tenant should be there so that any damage or dilapidation (over and above reasonable wear and tear) can be agreed there and then.
Joint tenants vs tenants in common
If you want to invest in a property with another person (or people), there are two ways to own it: as ‘joint tenants’ or ‘tenants in common’. These have different legal and practical implications, so it’s important you’re clear on the difference.
Joint tenants
You really are buying ‘together’. From a legal perspective, each person owns the whole of the property so you have to act as a single entity. That means you’ll need to get a joint mortgage and if you want to sell the property or make any alterations that require owner consent, everyone has to be in agreement.
One particularly important thing to know is that you cannot leave part of the property to someone else in a will. If one of the joint tenants dies, the property automatically passes to the other(s), known legally as ‘right of survivorship’. For this reason, it’s usually married couples or family members that are joint tenants.
Tenants in common
With this type of ownership, each person owns a separate share of the property and it can be divided up however you like. For example, it could be 50/50 or one person could own 60% and two others 20% each. Because of this, tenants in common can leave their share to whomever they like in a will.
All parties must agree in order to sell the property and, although it is possible to mortgage each portion separately, very few lenders will agree, so you’ll usually have a joint mortgage.
This is how most friends and relatives buying together will own property.
As with any legal transaction that you make, it’s wise to take independent specialist legal advice before moving ahead.
The Reeds Rains Content Marketing Team
