Inventory Management
Synonyms: Inventory List، Furniture Inventory، Check-in/Check-out Inventory، Schedule of Condition
Last updated: 2026-09-25
Short Definition
Inventory management in a property is recording the furniture, appliances and fittings in a furnished unit or building, describing each item’s condition, quantity, photos and sometimes serial numbers, then checking them at the tenant’s move-in and move-out and during periodic inspections, and identifying what is damaged, missing or due for replacement.
Overview
Legal Basis
It rests on the Civil Transactions Law (Royal Decree No. M/191 dated 29/11/1444H): delivery of the property and appurtenances in fit condition (Article 416), the tenant’s duty of reasonable care and to compensate harm caused by transgression or negligence (Article 430), and return of the property in the condition received except for normal wear and tear (Article 435). The Real Estate Brokerage Law (Royal Decree No. M/130 dated 30/11/1443H) defines the security deposit, and its Article 12 requires a deposit received by a broker to be handed to REGA or its authorised party, and refers disputes over the deposit and damage assessment first to REGA-designated experts with both parties’ consent, their fees shared equally, failing which the parties may go to the competent court.
Practical Example
A furnished two-bedroom apartment in Al-Olaya, Al-Khobar, is let at SAR 70,000 a year with a SAR 3,000 deposit. At move-in the manager prepares a 64-item list (beds, sofas, fridge, washing machine, TV, curtains, kitchenware) with dated photos and each item’s condition; both parties sign it and it is attached to the lease. A year later the tenant moves out and the check shows a TV with a broken screen, bought 3 years earlier for SAR 2,400, and faded sofa fabric. The owner treats the fading as normal wear not chargeable to the tenant, and values the TV’s remaining worth at about half, SAR 1,200 after depreciation, deducting it from the deposit and returning SAR 1,800. The tenant disputes the valuation, so they agree to refer it to an expert and split the fee equally.
Common Mistakes
- ✗Letting a furnished unit without a signed, photographed inventory, then trying to prove an item existed or its condition after move-out.
- ✗Charging the tenant the price of new furniture instead of the depreciated value, or charging for normal wear the tenant is not liable for.
- ✗Keeping the whole deposit without a detailed statement of damage, amounts and supporting documents.
- ✗Using vague descriptions such as ‘fully furnished’ instead of the number, type and condition of each item.
- ✗Not updating the list when an item is replaced or added during the lease.
International Differences
Inventories are an established practice worldwide in furnished lettings. In the UK the ‘inventory and schedule of condition’ is the basis for any deduction from a protected deposit; in Dubai inventories are attached to furnished-unit leases; in Turkey the handover report (teslim tutanağı) is the usual evidence; and in Egypt a list of movables is attached to furnished leases. The shared rule is that normal wear is not charged to the tenant. Saudi Arabia is distinctive in having a statutory mechanism that sends deposit disputes to REGA-designated experts before the courts.
