Tenant Referencing – Avoiding Bad Tenants that might Require Eviction
A Tenancy has more chance of success if robust referencing and vetting of tenants is carried out. And conversely less chance of requiring expensive and protracted legal Possession proceedings.
Finding Tenants and Screening
With the Government ban on charging Letting Agents fees to tenants, more landlords are likely to find their own tenants. This can be done by advertising on one of the online portals such as Open Rent.
This is a perfectly viable alternative but there are a number of measures a Landlord can take to enhance the screening of Tenants.
Where are they residing / privately renting at present? and how long have they been there? Who is the tenancy for? are they employed, do they smoke or have any pets? etc.
If a respondent enquiring is clearly not suitable, such as a single person wanting to rent a three bedroom property or for other financial reasons, then politley decline the viewing request (You are arranging a block viewing – which is true, and you’ll get back to them when a date has been arranged, although you don’t.
When you have received a number of enquiries from at least two or three potentially suitable applicants, arrange staggered viewing times. If one or more don’t turn up, it won’t be a waste of a journey for the Landlord. Use the time waiting at the property to take photographs or go over a previous Inventory, updating any minor items, damage or wear and tear.
If a tenant viewing appears suitable and expresses their intention in renting, look them in the eye. Ask them if you can visit the property that they’re currently renting. After all, its your property you’re entrusting to them. And after a couple of months, your property should be in the same state of tidiness, cleanliness or otherwise as the property they currently occupy. Sometimes the reaction will tell you all you need to know.
If you feel uncomfortable with this, note what vehicle they’ve arrived at your property in. Then drive past the address they’ve given for their current residence. Is the car outside? What is the condition of the exterior of the property? That can sometimes speak volumes!
If you decide to move forward to instigating a Tenant reference check, ask for a ‘Holding Fee’ capped by recent government regulation to one weeks value of rent. Make a record of the conditions of this fee, which according to the Consumer and Marketing Authority, should be fair to both parties.
For example, an email to a prospective tenant requesting the sum of one weeks rental value, for which the cost of reference checks will be paid. If the prospective tenant doesn’t go ahead and take up the tenancy, they will forfeit the holding fee which will reimburse the landlord for loss of other potential tenants and possible rental. (Need to say briefly why Landlord would withhold their money). And, if for an reason the landlord didn’t grant the tenancy, possibly due to reference results, the holding fee, minus the reference costs of £x amount would be returned to tenant. If the tenancy is granted, the holding fee will form part of the first months rent. If applicant agrees to these conditions, they should transfer the holding fee to the landlords bank account Number xxx… Sort Code yyy…
If you’ve used a Letting Agent on a Find a tenant Only basis, the above steps may not be available, however the letting agent contract should have been read thoroughly and the Landlords agreement and consent obtained Before the Agent signs up a tenant on the landlords behalf.
- Ask for last 3 months bank statements. Copy of last wage receipt ( which should show their National Insurance number )
- Carry out Right 2 Rent checks, even if its obvious that the tenants are born in the UK, so that it helps evidence no discrimination by landlords only asking certain tenants for copies of their passport.
- A copy of a UK citizens passport can be useful forTracing Agents if the person is subsequently a defaulting tenant who needs to be located for County Court action on rent or other debt.
- A number of letting Agents are using social media checks on tenants with the current generation be generally free and open with their media accounts.
- Details of any vehicles and a next of kin – alternative correspondence address will not only be sought by some deposit schemes such as DPS, but will be of assistance to Tracing Agents.
- Review the tenant reference report, expecting to see some of the above information, and seek out whatever isn’t included. Details of the last three places of residence, together with landlord details and periods of occupation, even approximate should be sought. Do Not Only take a reference from the current landlord, who may have a vested interest in seeing the tenant ‘move on’.
- Ensure you have your new tenants written consent to speak to the Local Authority, Department for Work and Pensions or any other body in connection with their tenancy. This would provide the landlord with permission to discuss and receive information about any subsequent Housing Benefit or Universal Credit claim that tenant made should their employment status change.
- Ensure that Deposit AND first months rent is cleared into landlords account BEFORE the tenancy commences and ideally, Incoming inspection, check of inventory and signature – Then sign Tenancy agreement and hand over keys. ( I hope your reading this saying to yourself, Well, of course, rather than, Why is that ? !!! )
- Issue a 6 month Fixed term and then let the tenancy (automatically does ) go Periodic, that is until the tenant gives One months Notice, or the Landlord gives two months Notice ( which is on a Section 21 document. – Why 6 month fixed term ? – because a Landlord is in a stronger position as soon as a tenancy is periodic, as a Section 21 Notice for Possession cannot expire until the end of a fixed term.
If a landlord wants to increase rent, use a Form under Section 13 (2) of the Housing Act ( Don’t need to and not in your best interests to issue further tenancy agreements for reason above.
Within a day or so of a months rent becoming outstanding, enquire with tenant ( not to many as to be considered Harassment – if Tenant isn’t going to respond, repeated attempts don’t usually secure truthful responses. )
Allow no more than a few days to allow the tenant to ‘sort out any banking oversights’ – a usual excuse, which should be more than enough time and if the rent is still outstanding, within a week of it becoming due [ providing tenancy is periodic ] ~ Serve a Section 21 Notice.
If still no rent received by next months rent due date, Serve a Section 8 Notice.
If a Landlord wants Possession Friend to serve the Notices, a payment will be incurred but offset against the cost of Full Possession fee’s if that becomes necessary.