- This is one the most important aspects of finding new tenants. Whatever else you do always ensure that you run proper background checks on new tenants.
Proof of ID
- . Proof of ID can be proven by checking the tenant’s passport or photo driving licence. Always ensure these are originals and not photocopies. Ensure that you take a copy of these documents.
The “Right to Rent” check is carried out to ensure that every adult potential tenant has the right to reside in the UK. The check is to see each person’s original residence documents (work visa, residence permit or Certificate of Entitlement to the right of abode in the UK). This needs to be done face to face using the original documents whilst ensuring the dates haven’t expired. Again, a copy of each document should be taken with them being retained a year after they stop being tenants. If their stay is time limited, then a check needs to be carried out every 12 months or just before the tenant’s right to stay is about to expire if there is less than a year remaining of their stay.
- To further reinforce your confidence in a tenant you also need to ensure that they are earning enough to pay the rent, don’t have a bad credit history and if possible that previous landlords were happy with them.
- If you haven’t got the time to undertake all these checks yourself then a good alternative is to use a referencing company for which the cost is about £25. You only need to send them the tenant’s name and contact details and they will contact the tenant to get the required information. They then contact the relevant third parties and send you the results in due course. This can be done in a few days but may take longer if referees are not forthcoming straight away.
- It's always best to go with providers’ that give the most comprehensive information which should include:
- Bankruptcy and insolvency check
- A check for CCJ’s.
- Any undisclosed previous addresses possibly linked to bad credit. .
- UK residence confirmation – although you are still required to view the original documents.
- That their bank account details are linked to them. .
- An electoral roll check to confirm previous addresses.
- A reference provided from previous landlords.
- Employment status and income.
- Hopefully any tenant would have not reached the reference stage if they had something to hide but if bad references come back here is what to do. .
- If their employment status is different from what they have told you or they are actually living in a different situation then don’t take a risk with someone who has been dishonest with you as you don’t know what else they have to hide.
- It may not be possible to gather sufficient data if someone has only just started employment or if someone is self-employed and paying themselves a low wage to enable the business to thrive.
- You could accept them on a six-month basis with the whole rent up front and re-asses after the six months is up.
- You could reject them and go for a tenant you have more information on.
- You could ask the tenant to provide a guarantor.
- A guarantor is a person who will be legally liable for the rent if the tenant defaults on their rental payments. The guarantor will co-sign the tenancy agreement. You will ask for a guarantor if the tenant fails referencing or doesn’t have sufficient income to meet rental payments. A guarantor will ideally be a homeowner as they have assets to pursue over any non-payments. The guarantor should also be referenced checked. A guarantor is not liable for damage caused to the property by the tenant.
- If there are sharers involved the guarantor should be made aware of what proportion of the rent, they will be liable for on the event of non-payment. Sharers are usually jointly liable for non-payed rent so the guarantor should have similar liability. If there are multiple tenants on separate agreement’s, then each will need their own guarantor
