As a landlord, have you ever welcomed a new tenant with open arms, handed over the keys to the property and have them move in, only to discover that they stop paying the rent soon afterwards? Or maybe they weren’t even who they said they were?
If so you’re not alone.
Many landlords fail to do basic background checks on their tenants before they move in, to confirm their identity and their ability to pay the rent. By then, it’s too late, the AST has been signed and the landlord is forced to go through what will undoubtedly be lengthy possessions proceedings – all the time losing an ever increasing amount of money.
Our recent quarterly survey found that nearly three quarters of landlords who sought possession of their property did so because they experienced rent arrears. After all why would a business turn away a paying tenant?
But landlords can often avoid problem tenants by carrying out a simple background check on them before they move in.
A basic check will usually provide you with a County Court Judgement search, history of their past addresses, a check to confirm their identity and an alias name search, along with a bankruptcy or insolvency inquiry. A full tenant check will include all of this plus references from their employer and previous landlord, bank account details and even an assessment of a their ability to pay the rent.
Checks give peace of mind for landlords and should be done on all prospective tenants. NLA Tenant Check found that approximately one in twenty tenants processed had one or more County Court Judgments (CCJ) against them at an undisclosed previous address during the first half of 2011. It also revealed 39 false employments and 61 negative references from previous landlords or letting agents.
If you do intend to carry out your own checks, you should get the following information from the tenant:
- Personal contact details
- Next of kin contact details
- Accommodation addresses for the past three years
- Contact details of previous landlords
- Income (could be Local Housing Allowance)
- Referee contact details
But keep in mind, if you want to contact referees you must seek the tenant’s explicit written consent in advance. 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. When carrying out any kind of referencing it is also worth considering your obligations, under data protection rules, to store, process and handle personal information responsibly.
For more information on tenant checks, you can down download Spotlight, the NLA’s Guide for Landlords at www.landlords.org.uk/spotlight.