What you Should Know About Tenant Referencing

Tenant referencing is a vital tool. It gives landlords piece of mind that their tenants can afford the rent and don't have a dubious rental history.

The question is - what sort of behaviour are you trying to weed out when seeking a reference? Here are some of the behaviours that can consume landlords’ time and money. Tenants who…

…trash or don’t clean up before leaving

The perils of reckless tenants were highlighted when a couple left a £270,000, four-bedroom Lincolnshire house they had been renting covered in faeces from their fourteen dogs; rubbish up to a foot deep in some rooms and many of the fixtures and fittings broken.

…don’t pay their rent or ‘disappear’

Fresh research by the Residential Landlords Association (RLA) reveals that more than a quarter - 28% - of landlords have experienced rent arrears in the past 12 months.

…sell your property or apply for a mortgage

Landlords are increasingly being targeted by criminals who steal their identities in order to sell their rental properties behind their backs. This crime, known as ‘property hijacking’, has trebled to almost £25 million in the last four years and landlords are often targets.

…involved in drug dealing or drug manufacture

A quick flick through any local newspaper will reveal an increasing number of evictions and arrest for ‘cannabis factory’ operations. According to landlord insurer Direct Line for Business, over 90% of the factories are located in domestic premises.

And finally…

Tenants who break rental contract clauses – for example by smoking or keeping pets within a property; have poor credit histories (e.g. multiple County Court Judgements); and those with histories of anti-social behaviour.

Comprehensive tenant referencing should include:

• Credit check — looks at tenants' credit histories
• Affordability check — compares tenants' salaries with the rent, and judges whether the finances stack up
• Previous landlord written reference — ascertains whether tenants have a good rental history
• Employer written reference — asks their employer to verify that they are a member of staff, and that their disclosed salary is correct

Find out more about Upad Referencing

If tenants might struggle to afford the rent, then they should be asked to provide a guarantor: someone who will pay the rent if the tenants can't. The guarantor will also be referenced as proof they can afford the rent if required.

A referencing report gives landlords the information they need for technically knowing their tenants are good for their property, but landlords should use their instinct too. This is why meeting tenants personally is such a crucial part of the lettings process.

Upad referencing includes all the checks mentioned above. Tenants contribute £75 (£62.50 + VAT) towards referencing. This discourages those that can't afford the property from applying, and guarantees that the applications of those enquiring are genuine.