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Do we need better background checks for tenants?

As the private rented sector expands, is there a need for more stringent and better background checks, asks Marc Da Silva?

Marc Da Silva

004-tenantsSoiled carpets, unemptied ashtrays, graffiti on the walls, rubbish and dirt in every room, this was just some of the chaos that greeted one landlord when he visited his property in Blackpool.

Despite letting his house in good faith to a young family, the dismayed landlord has now, and not for the first time, been left with a major clean-up bill – close to £2,000 – and no rental income as the tenants had scarpered.

“The whole house is pretty much ruined.  It will have to be gutted, and the last time this happened it cost £1,000 to take everything to the tip,” the landlord commented.

The issue of tenants behaving badly, wrecking homes, failing to pay their rent on time, if at all, is not a new problem confined just to Blackpool; it is a quandary that many landlords across the country can unfortunately relate to.

“Stories about tenants being left without anywhere to turn by greedy and money obsessed landlords dominate the media, while any evidence of tenants causing consternation is widely ignored or downplayed,” said a spokesman for the Residential Landlords’ Association, “This type of occurrence is all too common in the private rented sector.”

While it is not always easy to signpost early warnings of rogue tenants, there are measures that can be taken to minimise the risks before agreeing to a new tenancy.

Tenant referencing

From looking at past tenancies to issuing a credit check, the vast bulk of letting agents that we spoke to agreed that a major aspect of their duties is to carry out background checks on the people they let homes to by referencing tenants, as this is when many ultimately avoided. “Tenant referencing is the
most important part of our job,” said George Spencer of lettings agency Rentify. “We pay special attention to referencing tenants, as there’s no point in having a tenant who can’t pay the rent.”

Vetting tenants

Tenant referencing provides all the background information on prospective tenants, helping landlords and agents make an educated choice about who they let properties to and importantly their ability to pay the rent on time each month. Arlo Risby, Lettings Associate Partner at Howard Cundey, says referencing should involve: “A thorough credit check to ensure they don’t have any county court judgements or bankruptcies, a rent to earnings affordability check, proof of employment and income, passport or driving license for photographic identity verification, proof of current address and landlords’ reference plus anti-money laundering checks.”

“Tenant checks should be done by an independent referencing company to ensure that they are handled in a professional manner.”

Impartiality

Like Risby, many agents agree that relying on professional third-party referencing agencies to independently compile tenant references should help to make potential disputes before, during, or at the end of a tenancy easier to resolve.

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Arlo Risby Howard Cundey

Century 21 UK’s Chief Executive, Rob Clifford, recommends that in all instances, “A full reference, including credit check, previous landlord reference and employer reference, is completed each time using a third-party supplier [he tends to use Legal4Landlords].”

Stephanie Nash, Head of Lettings at Strutt & Parker in Fulham, said her firm use referencing company Homelet as it helps to “speed up” the whole tenant referencing process, and is “very secure”.

“A reference allows the landlord to assess whether the tenant will be suitable for their property and the reference company that we use are very detailed and often return references as ‘a fail’ if they do not deem the tenant wholly suitable in their ability to pay the rent,” she said.

But Nash’s colleague, Nicky Ennor-Glynn, said that while Strutt & Parker do use an external company to reference tenants, they also make their own checks.

“We also perform our own internet search on all potential tenants when they register with us and use Lonres, which is an interagency website, to ensure that there is no detrimental information about them on the forum.”

July 22, 2014

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