Rental Property Inspections
Rental property inspections are conducted for a variety of reasons to assess the condition of the property in order to protect (1) the owner’s financial investment, (2) the physical property, and (3) tenants’ health and safety. The owner/landlord inspects his property to make sure the tenants are compliant with lease terms and conditions; there is no illegal activity at the rental property; to eliminate safety hazards; to assess maintenance and repair tasks; to maintain the property to habitable conditions; and to protect property value. A regular schedule of property inspections can improve tenant overall satisfaction with the property management which in turn can reduce tenant turnover.
Most property inspections require physical access to the rental property to assess exterior conditions and in some instances access to interior units. Most states grant tenants the right of quiet enjoyment of the rental premises – the right to exclude others from the premises (including the landlord); the right to peace and quiet; the right to a clean and habitable environment; and the right to basic services. A landlord cannot enter the rental unit except as provided by statute or terms of the lease agreement.
Statutes specify the circumstances by which a landlord can enter the tenant’s unit, most commonly to deal with an emergency, to inspect the premises, to make repairs, alterations or improvements, to show property to prospective tenants or buyers and during a tenant’s extended absence. In most states 24 hours’ notice is presumed reasonable notice. In some cases the landlord’s lease agreement may specify different conditions from statutory law for landlord entry to the premises.
Type of Rental Property Inspections
Landlords customarily schedule property inspections for the start of the lease term (move-in), the termination of the lease (move-out), and at least one routine/seasonal physical inspection of the property during the tenancy. However there are additional inspections that may be conducted for property management or required for legal compliances.
Move-in Inspection
Many state laws require a move-in checklist to be completed when possession of the rental property is given to the new tenant. The checklist is a written statement to document the condition of the rental property at the time of the move-in inspection as signed by the landlord and the tenant. The check-list provides a dated reference for damage to the property, beyond normal wear and tear.
Move-out Inspection
Most lease terms and conditions require the departing tenant to return the rental property to the same good condition as documented on the move-in inspection checklist.
The move-in inspection report is the reference document to evaluate the overall condition of the property at termination of tenancy. The move-out inspection cannot be more restrictive than was the move-in inspection. Some states have special rules and requirement for move-out inspections and use of checklists. In a few states the tenant must be provided a pre-move-out inspection where the landlord notes property defects that need to be corrected if the tenant wants to maximize his deposit refund.
Generally a landlord can charge for cleaning and repairs necessary to restore the rental unit to the move-in condition. A landlord cannot deduct for costs of ordinary wear and tear. The costs must be a reasonable and fair price for the type and amount of work performed. A landlord cannot charge the tenant for damage that was present at move-in, replacing an item when a repair would be sufficient, or cleaning when tenant paid a non-refundable cleaning fee.
Routine Inspection
A routine maintenance inspection helps to prevent the property from losing value due to maintenance and repair issues that, if left unaddressed, could cause serious property damage.
During a routine inspection, the landlord checks to make sure the property is safe and clean, whether there are housekeeping issues that could affect the safety and security of residents, and inspects for issues related to plumbing such as leaking faucets or moisture problems in kitchens and bathrooms, HVAC systems, and electrical wiring. These scheduled visits also alert the landlord to potential problems such as trash and garbage accumulating on the property, cracks in window panes, unauthorized pets, additional occupants, or illegal activities on the property.
Some landlords conduct a drive-by property inspection of their single-family rentals to visually inspect the rental property at a distance for issues that could be signs of lease violations, such as exterior damage to the property structure, landscaping issues, or other signs that the tenant is not maintaining the property to good condition. However a landlord should keep in mind that although a drive-by inspection would not require notice to the tenant since there is no landlord entry, the tenant retains the right to quiet enjoyment and privacy of the rental property. Excessive use of drive-by inspections could lead to tenant claims of landlord interference with tenant rights and landlord harassment.
Emergency Inspection
In most states, a landlord may enter the rental property in the case of true emergency. A true emergency is an imminent and serious threat to health, safety, or property. In some states a landlord may enter the rental unit during an extended absence by a tenant for purposes of inspection and/or securing the property from damage such as a severe weather emergency or a situational emergency such as gas leaks, water main breakage, etc. There could also be a situation where landlord entry to the rental property is requested by law enforcement or emergency personnel for health and safety reasons.
Seasonal Inspections
Seasonal inspections are preventive maintenance inspections for exterior and interior conditions at the rental property. Single family rentals and multi-family units will have different issues to address for seasonal maintenance and winterizing, but a seasonal checklist should be prepared to ensure the interior spaces and exterior structure are properly maintained for the appropriate season and all systems and appliances are in good condition. While conducting a seasonal inspection, a brief routine inspection could also be done to check on lease compliances and identify items needing repair.
Section 8 Inspection
For those landlords participating in the Housing Choice Voucher program (Section 8), a property inspection can be required during the initial approval process for landlord participation in the program, required annual inspections, program audits, or inspection as a result of specific complaints by the tenant to the housing authority.
Insurance Inspections
The owner/landlord’s insurance may require periodic inspection of the rental property to determine the liability risks and whether the type of property is insurable for the type of policy being purchased. Inspections may reveal deficiencies in coverages or adjustments as required for compliance with statutory requirements or landlord requirements.
State and Municipalities Inspections
State statutes and many cities and counties have requirements for compliance with building codes, fire safety, health and safety standards, or other regulatory issues. Property inspections could be required for structural and mechanical systems; health and safety requirements for prevention of pest infestations, vermin control, garbage removal; and fire safety including fire extinguishers, smoke alarms, carbon monoxide detectors, and sprinkler systems.
A property inspection may be required for new construction certificate of occupancy or required for a certificate of habitability to ensure the property is fit to be lived in and meets health and safety codes.
There could be inspections required to comply with construction for new build or remodeling work to ensure safety including a building inspection, inspection of systems such as HVAC, plumbing, electrical, or fire safety requirements such as fireproofing building materials.
Change in Property Management
If there is a change in the property management company, there is good reason to conduct a property inspection with the new property manager. Exterior and interior inspection should be conducted to provide adequate documentation of the condition of the property and any needed repairs. The scope of the property management contract may depend upon the assessment of the property during property inspection.
Other Types of Inspections
If the owner/landlord is seeking lender financing for building purchase or refinance, the lender might require a property inspection. For some properties the lender might require an environmental site assessment such as a Phase 1 inspection for environmental hazards.
Lender requirements could also require a property inspection for a new buyer of an existing rental property to determine property condition and assessment of property value. A prospective buyer may have contingencies in the purchase contract for property inspections such as a general property inspection to evaluate foundation, roof, electrical work, HVAC, plumbing issues; radon testing; termite inspection; pest infestation; or subsequent inspections of a specialized nature if problems are found during the initial inspection.
There could be other types of inspections such as survey work, property appraisals, tax record corrections, or property easements that require a premise visit.
Documentation
A landlord should keep detailed written records of all property inspections, including notes with dates and supporting video and photographs. Documentation of property inspections and findings can help protect against claims of liability or negligence. Property inspection documents can also prove existing conditions of the property for insurance coverages and claims, and future property improvements.