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Tenant Check: What checks should I carry out on tenants?

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For a landlord knowing who you are letting to is important – so you may be asking, ‘What checks should I carry out on tenants?’.

You should ask the potential tenant to provide information and also documentation that will show that they will be a good tenant.

However, there is no legal requirement for a landlord to carry out tenant referencing – though it will bring peace of mind.

Also, for landlords in England, you will also be subject to the Right to Rent legislation which means your potential tenant will need to assure you, that they and any other adults who are living in the property, have a right to rent your home.

There’s a full list of the relevant documents on the Gov.uk website for the Right to Rent checks that a landlord or letting agent need to carry out.

For most tenants, their passport will have the necessary information but for non-UK applicants, then they may need to provide immigration documents.

Carry out reference checks

Usually, though it is common practice for landlords and letting agents to carry out reference checks to not only find out whether their tenants will be good and can afford the property but will take care of it too. The tenant will usually need to provide:

  • A reference from their current or previous landlord
  • A reference from their employer to show they have a job
  • Some landlords may require their tenant to hand over a recent bank statement to prove their income, but it is good practice for the tenant to cover up their account number for security reasons.
  • Self-employed tenants will need an accountant’s reference and possibly copies of their latest accounts.

It’s also not unusual for landlords carrying out checks on a potential tenant to ask them to provide a rent guarantor – this is someone who will agree to pay the rent if the tenant fails to do so. Usually, this will be the tenant’s parents or a family member.

It’s also important to carry out credit checks to see whether the tenant has had issues paying bills previously. However, you will need permission from the tenant to carry out a credit check first.

One reason why some private landlords fail to carry out a credit check is that this can take longer for their property to be rented out.

It’s also important to understand that a landlord (or their letting agent) cannot charge the potential tenant for their credit check as this has been illegal since June 2019.

Professional landlord organisations

A landlord can also sign up to one of the professional landlord organisations that may carry out a tenant check for a small fee.

The aim is to understand who you are letting your property to and have a thorough referencing check carried out to professional standards.

It’s always a good idea to be vigilant as a landlord and be reassured that you are letting your property to a reputable person before handing over the keys.

These landlord organisations may carry out various checks for various fees and a basic tenant check will ensure:

  • The tenant is who they say they are
  • Highlight any financial irregularities
  • Reveal whether they have damaged rented properties before
  • Determine what their income is.

The basic check will also look at whether the tenant has a County Court Judgement, or CCJ, and also check for bankruptcy and insolvency.

Ultimately, at the very least you should check their residency status, if required, and confirm what their current and previous addresses have been.

In-depth tenant checks available with references

There are more in-depth tenant checks available with references being sought from previous landlords and employers. The check will also confirm bank account details and these can take up to two days to complete. The additional checks will include:

  • A reference from their current letting agent or landlord
  • An affordability calculation
  • Proof of their employment and income.
  • As mentioned, for landlords in England, you will need to meet the Right to Rent regulations.

This is very important and should your tenant be a non-UK citizen, then you can check with the Home Office that they have a Right to Rent a property in the UK.

Failure to do this could see you receiving a hefty fine.

These tenant checks do not include tenants who are applying to live in:

  • A hospital, care home or hospice
  • Social housing
  • Student accommodation
  • A refuge or hostel.

Carrying out a tenant referencing exercise

The bottom line about carrying out a tenant referencing exercise is to reach an informed decision about who should rent your property and be reassured that you will receive the rent.

Also, if you have signed up to rent guarantee insurance, then you will need to prove to the insurer that you’ve carried out your referencing exercise correctly or run the risk that the insurer will not pay out should tenant stop paying rent.

It helps to understand that 92% of landlords in the UK do carry out referencing checks on their tenants and some will carry out this exercise for themselves, while most will use tenant referencing agencies.

Some of these agencies offer cheap and speedy referencing checks, including a credit check and searching for CCJs and the Right to Rent check.

Checks to carry out on a tenant

But for those landlords wanting to know what checks they should carry out on a tenant, then it is probably a sound move to get experienced professionals to do this on your behalf, but there’s nothing to stop you searching social media as well to see what your tenant gets up to – or even to call their current landlord for a brief conversation. The bottom line is that you are running a business and need to protect your income as well as your rental property from damage, so every step taken when checking a tenant will be time and money well spent.

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