What is a condition report?
A condition report is a document given to your tenants at the beginning of their tenancy that records the general state of repair and condition of your property on a room by room basis, including fittings and fixtures.
The report is used as a reference point when tenants move out of your property to determine if there was any damage caused the property while they were living there. At the final property inspection either yourself or your property manager will refer to this report and check off each item listed in it to make certain that the property is in the same condition as when the tenant took possession. It is at this inspection that any items that need to be replaced or repaired by the tenant are identified.
Why is it important to have a condition report?
This report documents the general condition of your property and is a key piece of evidence at the end of the tenancy if there is a dispute about replacing missing items, paying for cleaning or damages, so it is important you that you spend time checking the report to ensure it accurately reflects your property.
We suggest taking photos of the property before the tenants move in and provide a copy of these photos to your agent / landlord as record of the properties original condition.
Completing the condition report
The condition report needs to be filled out before the tenant moves in. You need to give two copies of the report to the tenant either before or at the time they sign the tenancy agreement.
In order to complete the report, visit the property and suitably describe all damage, no matter how minor (it is often minor damage that causes issues down the track), and take share photos of the property. If you are unable to visit the property yourself ensure you property manager conducts the inspection and provides you with the written report and corresponding photographs.
Ensure you and your agent keep a copy of the report for the duration of the tenancy as you will need to refer to it when the tenancy ends.
Legislation allows tenants a number of days to check the details completed by the agent/owner on the condition report, to confirm or disagree with those details. As the condition report can be used as evidence if there is a dispute about who should pay for cleaning, damage or replacement of missing items at the end of the agreement –it is in their best interest to go over it with a fine tooth comb.
Areas where the tenant does not agree with what is stated on the condition report should be noted on the appropriate section of the document. The tenant must complete the inspection report and return it to the agent/owner within the specified number of days or the condition of the property is deemed to be accurate as at the agent's completion.
Make sure both you and the landlord agree on the contents of the condition report before signing it.
Condition reports and co-tenancies
Condition reports are very important if you have co-tenants as they help in attributing liability to individual co-tenants for any damage caused to the property. Every time a co-tenant is removed or added to a lease the change is made at the bond board, with a change of shared tenancy form. Before the new tenant/s move in you should arrange a property inspection and record any repair and damage not documented on the Entry Condition Report. It is important to ensure this is done each time a co-tenant changes as it enables you to attribute liability to the correct tenant if the property has been damaged by them, rather than trying to chase them a long time after they have left the premises.
Condition reports and renewed tenancy’s
If your tenant is looking to renew their lease, the lease will note the date the condition report was carried out. A new report is not required.
Importance of Routine inspections
Your property manager will carry out periodic inspections of your investment property to ensure it is being well cared for and any routine repairs are being made. Each state or territory has different allowances around the number of inspections per year and check your property manager for how you will be notified of the upcoming inspection; will you be notified by post or email of an upcoming inspection.
This inspection should include the following:
- The lease terms are being honoured - no drug labs etc :)
- The property is being maintained in a clean and tidy condition.
- The grounds are being maintained in a clean and tidy condition.
- The property is not being damaged in any way.
- There are no more than the number of people specified on the tenancy agreement living at the property.
- No pets are housed at the property, unless otherwise agreed to.
- Any maintenance issues identified can be attended to.