Why Inspections Matter

A proper inspection is one of the most important legal requirements in a residential lease. It protects both the landlord and tenant, prevents disputes, and ensures a fair and transparent assessment of the property’s condition throughout the tenancy.

The Rental Housing Act (RHA) sets clear rules for entry and exit inspections, and understanding these obligations helps both parties avoid conflict – especially when it comes to deposit refunds.

Why Inspections Matter

Joint inspections play a crucial role in determining which party is responsible for specific defects or damage. These inspections:

• Provide a clear and objective record of the property condition.
• Prevent disputes at the end of the lease.
• Protect the tenant from being held liable for pre-existing issues.
• Protect the landlord from being unable to claim for damages due to missing documentation.

Inspection reports form the foundation of a fair, transparent, and legally sound rental relationship.

What Is an Inspection Report?

An inspection report is a detailed written record of the property’s condition, often supported by photographs or videos. The report should be completed in writing, signed by both the landlord or agent and the tenant, and include thorough notes on each room, fixture, and feature. Where relevant, the report should reference supporting photographs. Once completed, it must be attached to the lease agreement as an annexure. The more comprehensive the report, the better, as clear documentation protects both parties and makes the final deposit refund process far more efficient.

The Entry Inspection (Before the Tenant Moves In)

The RHA requires the landlord or the appointed agent to conduct the entry inspection in the presence of the tenant. This inspection documents the property’s condition before occupation, including all defects (whether major or minor). It also identifies any items that may require repair before occupation, as well as cosmetic or non-material imperfections that do not require immediate attention but should still be recorded for reference at the end of the lease.

Beneficial Occupation vs Cosmetic Issues

The landlord is only required to repair defects that materially affect the tenant’s beneficial occupation, meaning issues that affect the tenant’s reasonable ability to use and enjoy the property as intended. Minor or cosmetic imperfections, such as small scuffs, light paint wear, minor chips, or general signs of use, do not always need to be repaired immediately. However, they must be noted during the entry inspection so that the tenant is not held responsible for them at a later stage.

If No Entry Inspection Takes Place

If the landlord or agent fails to conduct the entry inspection with the tenant present, the RHA is explicit: The property is legally deemed to be in good condition at the start of the lease. As a result, the landlord forfeits the right to claim damages from the tenant’s deposit at the end of the lease. This is one of the strongest tenant protections offered to tenants in the RHA.

If the tenant does not respond to the landlord or agent’s request for an inspection, or fails to be present at the agreed-upon time, the landlord or agent is entitled to carry out the inspection without the tenant. In these circumstances, the landlord or agent may document the property’s condition independently, and this record will later be used to determine responsibility for any damages when the lease comes to an end.

The Exit Inspection (At the End of the Lease)

When the lease ends, the landlord or agent and tenant must again conduct a joint exit inspection. This assessment determines:

• Whether the tenant caused any damage during the tenancy.
• Which items are attributed to fair wear and tear.
• What, if anything, may legally be deducted from the tenant’s deposit.

For clarity and fairness, the exit inspection should be completed on the same document used for the entry inspection. This allows for an easy and transparent comparison between “before” and “after.”

When Inspections Affect the Deposit

If the Landlord Misses the Exit Inspection

If the landlord or agent fails to attend the scheduled inspection:

• The property is deemed returned in good order, and
• The landlord must refund the full deposit plus interest within 7 days.

If the Tenant Misses the Exit Inspection

If the tenant does not respond to requests for an exit inspection or fails to be present:

• The landlord may conduct the inspection alone.
• The landlord may document all findings independently.
• The landlord may deduct lawful costs from the tenant’s deposit.
• In this situation, the landlord must refund the balance of the deposit, with interest, within twenty-one days of the lease expiring.

Inspection reports can never be too detailed or too thorough. Joint entry and exit inspections remain the single most effective way to protect both parties, determine liability fairly, prevent disputes, and ensure a smooth and timely deposit refund.