Understanding the specific features of the inventory in the context of a residential lease agreement

The inventory is a document used to describe the condition of an item of property. Even though inventories may be used for the rental of any type of property (e.g. equipment, vehicle, etc.), they are mostly used in the context of residential lease agreements.

An inventory is generally established at the end of a tenancy agreement, but it is highly recommended to establish one at the beginning of the contractual relationship.

Inventory at the beginning of the tenancy

The law provides that an inventory, signed by both parties, must be established before the beginning of the tenancy whenever the lease agreement requires the tenant to pay a tenancy deposit (which, in practice, is nearly always the case).

An inventory must be established by the landlord and tenant (or their representatives) together no later than the moment the tenant takes possession of the premises. The more accurate it is, the more reliable it will be as a reference in case of subsequent problems. It should be dated and signed by both parties at the time of its establishment.

The inventory need not necessarily be a separate document, distinct from the lease agreement itself; it could also be the result of an exchange of correspondence, or simply a clause in the agreement.

The establishment of the inventory on entry is in the interests of both the tenant and landlord. Indeed, the law states that unless the inventory has been established, it is assumed that the dwelling was in a good, rent-worthy state at the beginning of tenancy, and that the tenant must return it in the same condition (unless it can be proven that there was already pre-existing damage when the tenant moved in). The landlord, for their part, may not make use of the rental deposit as payment for any damage caused to the property if no such inventory is available.

It often happens that leases contain a clause whereby the tenant declares that the property was in good condition when they moved in. This type of clause is valid, and means that, at the end of the lease, if no inspection of the premises was carried out at the beginning, the tenant can no longer provide any evidence to the contrary. The consequence is that the tenant automatically bears responsibility for any damage to the property noted when the contract comes to an end.

Thus, if the tenant notices damage on their first visit to the property, they must insist that such damage be mentioned in a report on the state of the property. Under no circumstances should they sign an agreement stipulating that the property is leased in good condition at the time of entry.

When, within a few days of taking up residence, the tenant notices damage that was not mentioned in the inventory, they can report the damage to the landlord (preferably by registered post), but the landlord may refuse to recognise the damage, and base the decision only on the check-in inventory signed by both parties.

A sample inventory form is included in the publication entitled, " Bail à loyer : La nouvelle législation en matière de bail à usage d'habitation" (Lease agreements - New legislation on residential leases) published by the Ministry of the Middle Classes, Tourism and Housing ( Ministère des Classes moyennes, du Tourisme et du Logement).

Check-out inventory

As a general rule, an outgoing inventory check is carried out when the tenant leaves the dwelling and returns the keys to the landlord (technically, the tenant is supposed to keep paying rent until the keys are returned to the landlord).

In principle—unless stipulated otherwise in the lease agreement—the tenant is required to return the rented premises in the same condition they were in at the start of the tenancy.

Damage caused as a result of normal use, wear and tear or dilapidation is not considered as rental damage (e.g., small holes in the wall due to nails used to hang paintings), and the tenant cannot be held liable for such damage. Therefore, there is no need to mention such damage in check-out inventory.

There is no legal obligation to establish a check-out inventory.

Who prepares the inventory?

In most cases, the inventory is established jointly by the landlord and tenant, or by their representatives, to avoid having to pay the fees for the services of a third party.

It can happen, however, that during the lease period, relationships deteriorate to the point that the tenant and the landlord no longer wish to have direct contact at the end of the lease agreement. In this case the inventory must be prepared by an independent person that the two parties have agreed upon in advance (e.g. a bailiff, a real estate agent, architect, etc.). This person is not necessarily an expert appraiser.

In the case of a dispute, it is recommended that the tenant be present when the inventory is established. Once the inventory has been established, it will be difficult to demonstrate that it is not accurate.

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