What Is Checked in Tenant Referencing?Written By PropertyLoop February 16, 2021
Tenant referencing is an essential step I every landlord’s journey to find their ideal occupants for their rental property. As can be expected landlords will know what they are looking for in a renter and want to avoid encountering a problem tenant, potentially leading to rent arrears, damage and complaints of antisocial behaviour.
What Checks Are Done for Renting a Property?
Before a tenant is able to move into a rental property, they will be expected to complete a series of reference checks, determining their suitability for the rental opportunity. This will see the applicant go through a series of affordability checks, seeing their employment, current income and credit history be scrutinized, revealing any outstanding debts or CCJ’s against the renter.
Further to this, landlords will also be expected to carry out right to rent checks on their tenants, seeing them assess identification documents and visa’s that confirm the residents’ right to remain in the UK over the course of the tenancy.
Lastly the tenant will be expected to provide a reference from their most recent landlord, giving the new owner an insight as to if the tenant missed any rental payments or caused damage to the rental property.
Can a Landlord Give a Tenant a Bad Reference?
As mentioned, one of the key elements of the screening process for owners is the reference from a previous landlord. These are incredibly insightful for owners that have yet to have met those that could prove to be their future tenants for a long period but are past landlords prevented from giving a bad reference. Put simply, no. This ensures that the renting process is fully transparent, whilst working to minimise the impact the problem tenant has on other rental property owners.
What if a Tenant Fails Their Reference Check?
As can be expected during the search for your ideal tenant, not all applicants will be able to pass the referencing process. But what happens if a tenant fails their referencing checks? Despite what may new landlords may think, even if a tenant fails their referencing checks they may still be able to rent the property. This will ultimately be down to the individual owner and how significant the problem is, but landlords commonly will request that a tenant either pays a number of months’ rent in advance or that they obtain a guarantor, allowing them to secure their rental income without the risk of the tenant falling into debt.
Is Tenant Referencing a Legal Requirement?
Landlords are legally obligated to carry out right to rent checks on any tenant that is over the age of 18 and will be using the rental opportunity as their main residence. These checks see the landlord evaluate the tenant’s right to rent a property within the UK, with the renter providing official identification documents to the owner of the rental. If a landlord is found to be letting a property to a tenant that does not possess sufficient right to rent, they will face an unlimited fine or a five-year prison sentence.
Who Pays for Tenant Referencing?
After the introduction of the Tenant Fees Act 2019, landlords are prevented from imposing many of the fees historically passed on to renters. Whilst owners have been known to charge tenants a series of administrative fees, often including the expense associated with the referencing process, to their future tenants. However, these fees have been deemed illegal leaving landlords exclusively able to charge the occupants of their rental property from replacing missing keys, interest on late rental payments and fees for amendments to the tenancy agreement.
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