Property Inspections
Property Inspections
Regular property inspections help protect your business, property, and tenants. For many reasons and in most states, property inspections may be a statutory requirement for rental housing compliances. As examples, warranty of habitability, landlord-tenant statutes, local jurisdictional requirement for business operations, local building, fire, safety, and health codes, Section 8 Housing Choice Voucher Program inspections, business insurance coverage, or rental lease agreement terms and conditions can require property inspections. The longer the interval between inspections, the greater potential for loss and liability.
Warranty of Habitability
In almost all states, a landlord is required to provide housing that meets basic structural, health, and safety standards. Under the legal doctrine of implied warranty of habitability, landlords are responsible to maintain and repair the rental property throughout the tenancy term. The basis for the implied warranty comes from either local building codes which specify minimum requirements for essential services or from widely held common-law beliefs of what constitutes decent housing. The source of the warranty determines the landlord’s responsibilities and the legal remedies available to the tenant. Since some states have more stringent requirements than others, it is important for a landlord to know the specific standards under his state’s law and to use those standards as a minimum standard for his properties in order to fulfill his legal responsibilities and protect his financial interests.
Landlord-Tenant Statutes for Tenant Move-In/Move-Out
Many states require a move-in checklist to be completed when possession is given to the new tenant. The checklist is a written statement of condition of the rental unit at the time of move-in. It documents any existing damage to the unit and/or furnishings and requires acknowledgement of the unit’s condition by the signatures of both the tenant and the landlord.
The move-in inspection should be done before the tenant moves in any boxes or furnishings or is given a key. This can be important because any such action that indicates having given the tenant possession can make him/her legally a tenant even if all documentation has not been completed and/or all initial funds owed by the applicant have not been received by the landlord. This can result in a dispute between tenant and landlord, potentially requiring a time-consuming eviction and significant financial loss for the landlord if the two parties cannot come to agreement regarding the checklist and other matters. The checklist is important for minimizing disagreements between landlord and tenant at a future time regarding the unit’s initial general appearance and maintenance at the time of move-in. Even though both parties think they will remember important items and think they have an understanding, such is not always the case.
The original signed checklist should be retained by the landlord in the tenant’s file and a copy given to the tenant. That same checklist should be utilized when the landlord conducts periodic inspections and will be used to inspect the rental unit upon the tenant’s move-out. The move-in and move-out inspections serve as evidence for why deductions were taken from the security deposit and for a lawsuit for damages in excess of the deposit.
The condition of the rental unit is documented on the move-out checklist and action taken accordingly if damage has occurred. After cleaning and repair/renovation the rental unit is again offered to tenants. The move-in checklist with the new tenant serves to document the “rent ready” condition of the unit and with the tenant’s signature acknowledges the tenant’s satisfaction with the general condition of the unit. Any items still needing repair or replacement are noted, with agreement to a projected resolution date. Any items noted “as is” serve as acknowledgment to both landlord and tenant that the condition existed prior to the new tenant’s possession of the rental unit. However, “as is” cannot be used for items related to habitability or covered by building codes or other governmental regulation.
The move-in checklist when properly completed is a valuable document that serves as the baseline for the condition of the rental unit throughout the rental term. It is helpful to have the move-in checklist available during the annual inspection of the rental unit. It provides a quick reference as to whether the rental unit remains in satisfactory condition.
Landlord Entry
Landlord-tenant statutes of most states require specific advance notification to the tenant before a landlord can enter the rental unit to conduct an inspection. There may be different requirements regarding landlord entry in the event of an emergency or other need to access the rental unit. If you know what is required by law and give proper notification, most tenants will cooperate to schedule a mutually agreeable time for inspection. A frank discussion of the benefits of safety and maintenance inspections should allay the tenant’s concern for loss of privacy and quiet enjoyment.
Landlord/Rental Property Inspection and Registration
Some municipalities have implemented rental housing inspection and registration programs to help ensure rental units meet basic housing code standards. These programs require properties to be inspected by qualified rental housing inspectors to help identify and correct habitability issues of health, safety, and security. Landlords are required to verify their properties meet quality of housing standards before they can register their properties with the municipality.
Local Codes
Safety and maintenance inspections of each rental property/rental unit should be conducted at least annually, preferably more often, in order to preserve and protect the rental property investment and as required by applicable landlord-tenant statutes or municipal codes.
Section 8 Inspection
If you have elected to participate in the Section 8 program, your rental property will be required to meet Housing Quality Standards (HQS) in order to receive the rental subsidy payments. These standards were developed to insure that rental units provide safe, decent, and sanitary housing under the Section 8 program. HQS standards are minimum habitability standards and there may be additional habitability requirements under state or local statutes.
Regular inspection of the rental premises by the landlord helps to insure that there are no health or safety issues that could adversely affect the Section 8 participant and to assist the landlord in identifying issues that pose a risk to the tenant and potentially create a liability for the landlord. As explained in the guidelines for participation in the Section 8 program, if routine maintenance is deferred, housing conditions could deteriorate resulting in substantial repair costs or threat of serious injury. Property and common areas must be maintained in good condition to meet program requirements. If the HQS inspection should find maintenance violations, re-inspection will be scheduled at a later date to allow the landlord time to repair or replace noted violations. Landlords can help reduce potential problems by conducting regular property inspections, preventative maintenance, and repairing and replacing broken or worn out items as needed.
Business Insurance Coverages
Property inspections may be conducted by insurance companies to evaluate property conditions, identify potential risks, analyze current business coverage, and offer recommendations for risk management. Terms and conditions of business policies may require scheduled inspections.
Lease Agreement Terms and Conditions
Landlords should conduct periodic inspections during the period of residency of each tenant. A lease agreement clause or section should cover these periodic inspections. These inspections should be done at least once annually, but even more often may be justified due to the age of the property or other reasons. It is best to have an inspection about midway through each year of the lease term. Reasons for such inspections include checking for unreported maintenance needs (e.g., leaking plumbing that could cause costly collateral damages), lease violations (e.g., unauthorized occupants or animals), safety hazards (e.g., smoke and CO detectors whose dead batteries have not been replaced as required by the lease agreement), and other possible issues of potential concern to the landlord and/or the tenant.
The importance of regularly scheduled inspections can be emphasized by clear language in the lease agreement and rental rules regarding types of inspections, timeframes, and notifications necessary for tenant health and safety issues and property maintenance and repair.