Have you found yourself with a nightmare tenant? Welcomed new tenants into your well maintained property only to find it destroyed by the end of the tenancy? Found yourself in a situation where your tenant just stopped paying the rent soon after moving in? If you have, then ask yourself did you do a thorough tenant check before signing the AST?
It is best practice to carry out a thorough check on prospective tenants; especially now with the new requirements for landlords to carry out immigration checks coming (see here), as it means risking a £3000 fine otherwise.
Tenant checks will highlight any abnormalities that should set alarm bells ringing. To make sure you don’t risk losing out, be it due to rent arrears or property damage, here are some top tips from the NLA on best practice when checking potential tenants:
1) Contact details
For starters you must make sure you have the personal and the next of kin contact details. Also asking for previous addresses for the past three years can help provide a picture of where and how long they have been at a previous property.
2) Confirming their identity
It is important to check people’s identity to make sure you don’t risk renting your property to criminals, fraudster or vandals, and especially to make sure you comply with the impending Immigration Act requirements.
3) Carrying out a credit check
If credit checks aren’t carried out you may be risking financial complications. By carrying out a credit check you will be able to find out if there are any CCJs against the tenant or if they are in receipt of housing allowances.
If you want to do a credit report, the prospective tenant must also sign to confirm that they understand a credit search will be done.
4) Written verification of employment/income
To make sure that the tenant is able to cover the rent it is important to check employment status and income.
5) Obtaining references from their previous landlords and employers
Referencing can help ascertain what sort of tenant you may be taking on, but bear in mind if you want to contact referees you must seek the tenant’s written consent in advance.
There are a number of tenant referencing products that offer these services, such as NLA tenant check. www.nlatenantcheck.org.uk
Renting out property is a business and it should be treated as such. As a landlord you need to make sure you put your investment first and don’t take the risk.