A guide to tenant referencing

All landlords dream of finding the ideal tenant – someone who pays the rent on time, without delays or excuses, and who treats the property like it’s their own, keeping it clean and not causing any damage.

The truth is, before a person actually moves in and starts their occupancy, you have no idea what they might be like – but even the most simple tenant referencing can at least give you a clue.

Some landlords may simply accept the first person to whom they show the property, (maybe out of desperation to get somebody in to pay them rent), but it could transpire that they really aren’t the ideal tenant – they may fall behind in their payments or cause untold damage.

As a landlord, it could save you money in the long run to take your time finding the right person (or people) to live in your property.

Ask for ID

First and foremost, be sure the person you’re dealing with is who they say they are – ask to see a driver’s licence or some other credible form of ID. Anybody providing false information here could be planning to use your property for illegal activity.

Legislation that came into effect recently requires landlords to check a prospective tenant’s ID and citizenship, to try to help control illegal immigration.

Renting your property out to somebody who is not entitled to be in the UK could result in fines of up to £3,000 for you as their landlord.

Use an application form

A basic tenancy application form can be found online or you can draw one up yourself. Getting prospective tenants to fill this in will help you gather a few of the essential details you need to perform reference checks.

Get the person to provide a phone number, email and current address, and ask how long they want to rent your property for, the number of people to be living there and the proposed start date.

Ask for the contact details of their current landlord, information on where they work and the same for all other occupiers.

You can ask for a guarantor, too (someone liable for the rent if the applicant proves unable to pay) and the names of at least two people who can provide personal references.

Also check if the tenant is a smoker, or looking to bring in pets – if you even allow these things.

Make it clear that you will contact those listed on the form for tenancy references. You can then write to the applicant’s employer, landlord and referees, getting them to vouch for this person and, hopefully, give an idea of their character and financial reliability.

Landlord referencing

Of all the people to contact, the one most likely to provide the best insight into what a tenant might be like is, of course, their current landlord. Have there been any issues, or would they wholeheartedly recommend this person to somebody else?

Sending over a landlord reference form is perhaps the easiest way to get this information. The landlord can simply tick ‘yes’ or ‘no’ to basic questions – such as whether the tenant still owes them money, if they have ever had difficulty paying the rent, broken the terms of their lease or caused any damage etc.

Example forms can be downloaded online – search for ‘reference for tenant’ and it’ll turn up a few in no time.

As well as a landlord reference, try to go and see the property where the tenant is currently living. Inspecting it isn’t always possible, but a quick visit might help to assess their standards of cleanliness.

Perform a credit check

In addition to making sure your property will be looked after, the other important factor is that tenants can pay the rent. A credit check will look into the financial history of an individual, highlight their current situation and provide a clearer picture of how they handle their money.

To perform a check, you will need permission from the person concerned – most online credit check companies have a consent form you can download.

There is a number of companies to choose from, all relatively inexpensive (starting at around £8.95 for the most basic tenant check).

This will generally reveal a person’s credit score, any outstanding debts, whether any County Court judgements have been filed against them, plus confirmation of their address(es) for the past six years.

Go with your gut

While it’s important to get as many written references as you can, common sense and gut feeling should also come into play.

If, when showing a person around your property, something doesn’t seem right to you, it’s fine to go with this reaction – wait until you meet someone you’re comfortable with.

The information you gather can only go so far. Once you’ve read through it all, if something doesn’t add up – the sums, perhaps, making you uncertain the tenant can afford the rent – you could request more information, such as payslips or bank statements. Or simply move on to the next person if you’re still not sure.

Don’t be caught out by fake references, either – it’s all too easy to use a letterhead to forge details! So, be sure to deal directly with the person you’re getting information from. And lastly, check out the person’s profile on Facebook.

It may feel a bit like snooping, but in terms of giving a snapshot into their life, social media is hard to beat.

Find out more about Landlord Insurance from MORE TH>N.

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