How to Avoid Common Move-in Inspection Missteps

It's a straightforward requirement from HUD: Conduct an inspection whenever a new resident moves in and complete an inspection report.

But property managers sometimes slip up on the simplest things. The problem: Without an accurately conducted inspection and a completed report to substantiate it, you'll have nothing to fall back on if there's ever a dispute about the condition of the unit at move-in. If damages occur down the road, for example, it could be your word against that of a resident—unless you have a solid inspection report that shows the unit was in good condition when the resident first moved in.

It's good to get in the habit of doing unit inspections correctly right from the start, and to do occasional inspections after that, notes Gregory Proctor, president of Windsor Consulting.

“Periodic inspections of the occupied units can help to ensure that the household is not doing excessive damage to the unit or has not created a health or safety issue by blocking egresses, removing batteries from smoke detectors, or creating trip hazards with TV cables,” Proctor says. “Owners and managers get written up during REAC inspections for items and issues caused by the residents.”

The most common mistakes managers make with the move-in inspections are:

• Doing the inspection after the lease is signed;

• Inspecting without a household member present;

• Failing to get the inspection report signed by the head of the household; and

• Failing to attach a copy of the report to the lease.

You can avoid these pitfalls with the following tips and tactics. Use them to help make sure you're complying with HUD requirements and protecting yourself.

Do the Paperwork in the Right Order

Sometimes site managers have household members sign their lease before they move in—and prior to the move-in inspection—figuring it's the most efficient way to get the paperwork completed.

But that is contrary to HUD rules. Handbook 4350.3, Occupancy Requirements, states that the owner and resident must inspect the unit before executing the lease [par. 6-29C]. In fact, the HUD model lease includes language indicating that the unit is in good condition except for any problems that are noted on the unit inspection report [par. 6]. HUD's sample Move-in Inspection Form, Appendix 5 of the HUD Occupancy Handbook, includes this language as well, Proctor points out. Our Model Form: Use Move-in Move-out Inspection Form to Prove Compliance, is based on HUD's sample.

If the inspection has not yet taken place and the resident signs the lease, that provision of the lease is not valid. Again, should a dispute about the condition of the unit at move-in arise down the road, it will be essential that the inspection was conducted before the lease, a binding legal document, was executed.

Don't Go It Alone

Never conduct a move-in inspection without a member of the household present, preferably the head of the household. Handbook 4350.3 specifically addresses this issue, stating that “landlord and tenant must jointly inspect the unit.”

You can designate a member of your staff, such as a maintenance supervisor, to represent the “landlord,” but he or she may not conduct the inspection solo. Property management experts advise having a standard operating procedure for move-ins that includes the joint move-in inspection requirement. Joint inspections are truly in your best interest, as they minimize the chance that a resident could claim the move-in inspection report did not accurately describe the unit's condition at that time.

Secure the Signature

Without the signature of the household member present at the inspection, the inspection report is useless if any dispute arises. Without a signature, you have no proof that the person was present at the time of the move-in inspection. The household member's signature also indicates that she agrees with the contents of the report.

Handbook 4350.3 says that your inspection report form should indicate that, by signing the form, the household member certifies that the report “correctly represents the condition” of the unit at move-in. Such language in the report form protects you if the resident makes a claim in the future that she didn't understand what her signature on the form meant.

Attach, Don't File

It seems to make sense that you would place the move-in inspection form in the household's file. But HUD has a different idea. Handbook 4350.3 states that the move-in inspection form “must be made part of the lease, as an attachment to the lease.” Because the inspection needs to be done before the lease is signed, the inspection report becomes an official part of the lease. Should you need to produce the complete lease in a court of law, the signed document is an attached and legally relevant and enforceable part of the lease.

Insider Source

Gregory Proctor: President, Windsor Consulting, 4165 John Alden Ln., Ste. 705, Lexington, KY 40504; (859) 252-6496; gproctor@windsorconsulting.com.

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