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Thursday, December 01, 2011

Referencing tenants

From the landlords point of view what you want is a long term tenant who treats the property as if they owned it. There is no way to be 100% sure of your tenant before they move in, but you can greatly increase your chances of getting it right with a few simple checks.

Ask for last three Payslips and / or Employer ref

a) Call the employer and confirm details - but get the number from the phone book or website – so you are not just calling their friend in the pub.

Get 3 Months Bank Statements and look for

a) Spending habits

b) Confirm their address

c) Confirm income and match payments with pay slips

Ask for both the current and prior landlord details 

a) Check the landlords details via Land Registry website (£4 well spent) to make sure you are talking to the right person - Just be aware the current landlord may be trying to get rid of them. So don’t put a lot of trust in these references, but still worth doing.

Do a Credit check on them – (a google search will bring up a number of providers) 
a) Check for County Court Judgments?

b) Listed on electoral roll at the last address?

c) Do they use any other names?

Get copies of their Id

a) Photocopy of driving license or passport - compare with original, are they really that person?

b) NI number

c) Google their name? Were they in the news? Search Facebook.

d) If they drove car what is the reg. number?
e) Get next of kin details.

Be extra careful….

a) If you have a group of young couple or single male renting a large house, take extra care as they may be looking to grow drugs.

b) Groups of males on average tend to be more of an issue.

c) Do not accept cheques (especially from overseas) as the funds can appear clear in your account but your bank can take the funds back up to six months later.
d) Have they given notice? A danger sign is if they say they don’t need to give notice or the notice period is zero.
e) When doing the viewing, ask questions, are the answers consistent and make sense?
f) Groups with females tend to be more stable.

And don’t be rushed

a) Do all of the checks – if the tenant is saying I need to move in now and is really pushing to move in quickly without providing all of the paperwork – view this as a danger sign.

a) Can take over 9 months to evict tenants

If you are a little unsure of your tenant you can ask for a guarantor and get them to sign a deed of guarantee in front of you. (other wise you can get a cases where the guarantor will say ‘that is not my signature’) Also get a copy of the guarantors ID, bank statements and land registry deeds of the property they own.

So take your time and do it correctly. It can be temping to cut a corners but the extra work done upfront can save many hours of rent chasing and heartache.

I hope this has been useful. Tulloch Priest

Priest Properties is one of the few letting agents in Nottingham who do the referencing in house instead of outsourcing it.

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Angels Property Services said...

I would also add that it's a good idea to join the free Landlord Referencing Service (LRS) or the TenantID scheme and upload (read the T&Cs here first) your tenant lists so that you are entitled to free searches of names of prospective new tenants against the lists of "bad eggs" tenants.

Remember a credit check shows financial history, not the way they left the last or second from last property!

Paul Barrett said...

Wrong on cheques; new legislation means after about 10 days the cheque can NEVER be recalled.
Therefore you can rely on funds after 10 days.