How to vet prospective tenants
Posted 9 September 2015 by Keith Osborne
Finding your perfect tenant can be a time consuming process, and it is vital to ensure you thoroughly vet applicants before rushing in to signing a contract.
Using a referencing agency
You will need to decide whether to employ a referencing agency or undertake the task yourself. The majority of letting agents conduct checks using referencing companies, with some providing a more thorough service than others.
If you do use an agency, ask the following questions: does the company conduct employment checks, fraud checks, identity checks and credit checks, and does it ask for thorough landlord references?
If you decide to go it alone there are plenty of resources available, including a range of online templates. To get you started, here's a brief guide to the different elements involved in tenant referencing.
Employment and landlord references
Landlords should always obtain an employment reference and a landlord reference from prospective tenants. The former exists to confirm the income and employment contract of your applicant. This helps you identify mistruths - if the applicant and his employer inform you of different salaries or contract lengths, alarms bells should start ringing. This type of reference is quite easy to obtain with a phone call or email to a specified manager or HR department.
Landlord references can be more difficult to obtain. In an ideal world you require references from two recent landlords, allowing you to compare them for any inconsistencies. However, some applicants might only have lived with their parents or may have ended on bad terms with their previous landlord, so this may not be possible.
An applicant must give written permission before you can conduct a credit check. A credit check will usually be undertaken by one of the three main UK credit agencies; Equifax, Experian or Callcredit. Credit reports detail various financial elements including borrowing, defaults or arrears, CCJs, address history and whether the applicant is on the electoral roll.
Identification checks can take several forms. You should first request photographic identification (either a copy of a driving licence or passport), which will verify the name, date of birth and appearance of the applicant.
Additional verification can be undertaken by requesting a council tax or utility bill to address of the applicant. Some landlords and estate agents also request three months worth of bank statements to confirm outgoings such as current rent costs.