Tenant Referencing Guide For Landlords
Your property is probably one of the most expensive things you own, so you don’t want just any one moving in.
Referencing is the best way to protect you as a landlord against bad tenants, ensuring that they are who they say they are, giving an insight into their ability to pay the agreed rent and their history of paying rent in the past. Therefore we carry out a comprehensive tenant reference on your behalf before recommending tenants to you.
Firstly the reference ensures that the tenant is who they say they are this is very important. A tenant giving false details is obviously indicative of potential bad intentions.
It is also important to establish identity in order to ensure that the contract is enforceable.
It also includes both employer and landlord references (although these may not be available if you are renting to a social housing tenant, or if the tenant has not previously rented).
It will check for any details of any bankruptcies and CCJ’s and previous credit history, which will indicate whether they have failed to pay bills in the past.
It will confirm their employment status and current salary, which in turn enables us to identify whether they are able to afford the monthly rent.
The comprehensive referencing provides a clear indication of whether or not your potential tenant has met our criteria, allowing us to let your property with confidence on your behalf.
If your tenant fails the credit check, it can be prudent to consider why, and how serious this actually is. For example, if they have a CCJ or were declared bankrupt, they will automatically fail the credit check. If the reason for this was that they were made redundant during the recession, but they have now had a full time job for two years and are easily able to cover the cost of their rent with their income, and have good references, perhaps it is worth considering allowing them as tenants, but with a guarantor.
A guarantor is a person who you, as the landlord, can ask to pay the rent if the tenant fails to do so. Of course, it is important that the guarantor also passes a reference check.
In the event that a tenant fails the credit check, but you would accept them with a suitable guarantor, we will reference check the guarantor on your behalf.
Often a tenant with a poor credit history will offer to pay a number of month’s rent in advance, or pay a larger deposit. Although this is clearly a sign of good will, unless otherwise stated in the contract, you cannot take money from the deposit to pay rental arrears.
If we do not feel comfortable with a tenant, their reference, or the option of a guarantor, we will discuss this with you however should you not accept them as a tenant. It is better to reject a tenant, and restart the process than leave yourself open to a potential bad tenant.