How to create a property condition report that fully protects you
Back when I was a property manager, I started looking after a property that had been through four separate managers in just two years.
Tenants had just moved out, it was filthy and repairs were going to cost more than $1,000 to get the place back to the same condition from when the tenants moved in (according to the owner).
Usually you’d just take that money from the bond. But there was just one problem: there was no condition report detailing what the place was like at the start of the lease.
Big mistake. My only option was to look through routine inspection reports, photos, reports and invoices from tradespeople but I couldn’t find anything to say the damage wasn’t there when the tenants moved in…so they didn’t have to pay. The landlord spent $1,000 of his own money on cleaning and damages. (The worst part? This was my new boss’s property!)
Stories like these are why you need an iron-clad and argument-proof condition report.
A comprehensive property condition report acts as protection against you and your money.
Unfortunately so many landlords leave them until the last minute. They miss things or even worse, they don’t do them at all because they get distracted with other issues when the tenants are moving in.
I get it. These condition reports can be difficult and timely to put together but that's why at Cubbi we make it as quick as possible for you as the landlord while ensuring the report is rock solid.
One key thing you need to know about property condition reports
Legally, condition reports need to be written and include the minimum content defined by the law in each state.
The written reports will have a list of items like flooring, walls and ceiling etc etc separated by room with categories next to each one like “clean” or “undamaged” with a “yes” or a “no” put alongside it and room for comments too. Here’s what one looks like. As you can see, they go into quite a bit of detail and they can take some time to put together.
But a good property condition report doesn’t stop there
Why not? Well, a written report is subjective and it doesn’t tell the full story. What your tenants think of as “clean” might not be the same as what you think and it doesn’t cover other details like the paint colour or even simple things like door handle types. You might have expensive door handles but it’s not mentioned specifically on the written report. Who’s to say the tenant can’t just replace all your door handles with cheap ones and sell yours on ebay.
It’s great to have that written report but it doesn’t fully protect you. You need to go further by adding some visual evidence.
Photos can help. But again, it’s hard to prove which room they were taken from and it still leaves you open to arguments from tenants. You don’t want to take a bunch of photos, group them together, name the files individually and get them all signed off. That takes way too much time.
That’s why you need one more thing to add to your property condition report that will make it argument-proof and protect you…
You need a video property condition report
Videos take care of the disadvantages I just mentioned about photos. You can move from room to room and really get a true sense of what the condition of the property is like.
Plus, video cameras on smartphones are such high quality you don’t need any extra equipment. You don’t need to be Spielberg to get it done; just point and shoot.
At Cubbi we have moved to video conditions reports for landlords. Here's how we put them together:
1. Landlords take a video of the property
Condition report videos are broken up into three sections: external, internal communal areas and bedrooms. They won’t take you more than 30 minutes to do.
Before you start recording the lights need to be on and blinds open, all the external and internal doors need to be open to ensure a smooth flow for you to walk through.
Each new recording needs to start with an introduction like your name, why you’re making the video, and the date. (And the address, of course!)
The basics instructions are to go to each corner of the room and point the camera at the opposite corner starting from the ceiling (hold for 3 seconds), the wall (hold for 3 seconds) and the floor (hold for 3 seconds). Move the camera slowly for better quality picture. Then repeat for each room.
You can narrate the video if you like. In fact, the more commentary the better. Just speak objectively, call each room out as you enter it, stick to the facts and let the video do most of the work.
Cubbi also put together a video on how to actually take a good video property condition report.
2. Videos are uploaded to Cubbi
Landlords upload their videos using an app called WeTransfer. It’s all done straight from your smartphone so there’s no need to transfer videos to a computer.
3. Written reports are filled out automatically
After the videos are uploaded landlords receive a full written condition report the next business day.
4. Landlords edit and sign the report online
This needs to be done before the tenants see and sign the report. This is what it looks like:
The written report comes in a spreadsheet format so it’s super easy to edit and check to make sure everything is correct.
5. Tenants receive the report to review and sign
As soon as the landlord signs the full condition report (including the videos) it’s sent to the tenant to review, agree/disagree, add comments and upload their own evidence.
6. Landlords receive the report for final review and signing
If the landlord doesn’t agree to any of the tenants’ comments both the landlord and the tenant meet at the property to agree on any unresolved issues before the landlord signs and completes the process.
That’s it! Video reports with Cubbi take a complicated process and turn it into something pretty easy that anyone can do.
The best part? Cubbi’s condition report process automatically fills out the written report for you so all you need to do is make the video.
Remember: you don’t want to be out of pocket if you can prevent it. Property condition reports are one of the most crucial elements of owning a rental property.
Streamline condition reports, lease renewals, rent increase and lots more.