Inventories should be prepared at the start of a residential tenancy and again so at the end of the tenancy term. The landlord and tenant should agree to the factual accuracy of both documents and this agreement should be recorded. The two inventories should be compared to identify the following:

• Damage to the landlord's property beyond fair wear and tear; or

• Missing items; or

• Lower level of cleanliness on check-out than at the start of the tenancy

In Gibraltar, it is usual for the letting agent to undertake the task of undertaking the inventory and usually, to be judge and jury of the tenant deposit administration. Despite this, the courts will have ultimate jurisdiction if there is a dispute over the tenant deposit.

The problem is, however, that the cost of the legal process will most often exceed the disputed sum. Hence, both landlord and tenant have to trust the knowledge, professionalism and independence of the letting agent managing the property.  

In the last two months, we have been asked for our advice by three separate tenants of properties that we do not manage. Tenants seeking advice, feeling let down by their agent, landlord or both.

We cannot discuss individual cases, however, suffice to say that it is clearly not fully understood by many of those administering the tenant deposit that the tenant deposit is the tenant’s money until and unless it can be proven by the landlord otherwise. Proven with evidence.

So, if the aircon remotes are missing at the end of a tenancy term, the landlord (or agent on his or her behalf) cannot deduct the cost of new aircon remotes without tenant consent unless there is evidence that those remotes existed at the commencement of the tenancy.

Furthermore, if there is a chip in the granite of the kitchen surface, and the landlord seeks the tenant deposit to use for the repair or renewing of the surface, this claim is open to being contested by the tenant (who may argue that it was not he who did this) unless the landlord can demonstrate that there was no such chip at the outset.

Perhaps the most contested case is where there has been some damage of an already second-hand piece of furniture and the landlord assumes that the tenant deposit can be used in lieu of a new for old insurance policy. This is just not the case. There are strict rules on how sums should be apportioned to prevent ‘betterment’. This issue is covered more fully in a previous blog of ours entitled the “Whys and wherefores of the tenant deposit”.

The consistent theme behind most disputes is the quality of the inventory undertaken at the start of the tenancy. If you just have “4 x chairs and a dining room table” listed, then the landlord is unlikely to succeed in any dispute in respect of damage. If you have “teak dining table of 2m x 1m with 4 x matching dining chairs with padded green leather seats, all in good condition without any marks or scuffing”, then the landlord is more likely to win a case where excessive scratches appear during the tenancy. If the inventory includes high resolution photographs, dated at the beginning of the tenancy and approved by both landlord and tenant at the same time, then the landlord is in the best position to support a claim.

The converse is also true. A tenant, moving into a property which has been lived in before will want photographs of all the furniture, fixtures, fittings, appliances plus walls and decoration to support the fact that the property was not perfect on day one. Hence at checkout 12 months (or so) later, the tenant is not unfairly charged for the pre-existing damage.

A quality inventory is essential for both landlord and tenant. We would urge both tenant and landlord to insist upon it. Without one, both parties are at risk.

In the UK, residential tenancies are covered by a tenant deposit scheme, whereby tenant deposits are held by approved independent third parties under certain protection guidelines.  An adjudicator deals with tenant deposit disputes in a system much more consumer friendly and affordable than that in Gibraltar. 

Suzy Hersham, Head of Dispute Resolution at “My Deposits” an authorised deposit protection scheme in the UK states:

“The adjudicator’s decision will be based on the evidence presented. The evidence provided should be both robust and reliable in order to support a claim. If a landlord makes submissions which are not supported by evidence the adjudicator may have no option but to disregard them. As a result, when the deposit is returned to the tenant in deposit disputes this is primarily because the landlord has not provided a strong enough case to keep it.”

There are ample case studies available on the internet of how quality inventories, with photographic evidence, signed off by tenant and landlord, have been the basis of a claim or defence against the incorrect use of a tenant deposit.

If you are a residential landlord or tenant in Gibraltar, or thinking of becoming one, we suggest you ask yourself, do you have the evidence to start or defend a claim should the need arise, in respect of the inventory at your property. If you have an inventory that states “4 x chairs and a table”, the answer is likely to be no.

At Chestertons, we use UK based specialist inventory software that records the inventory in high definition at both check in and check out and which is stored in the cloud. Each photograph may be examined in further detail if required. The printed inventory report extends to some fifty pages (we rarely print it out but can do if required). This means, the chances of a dispute are reduced significantly and, should a claim or a defence to a claim need to be made, we have the evidence to support such claim or defence.

In Gibraltar you have a choice of letting agents. Not all letting agents are the same. Choose wisely, your tenant deposit could depend upon it.