Can Landlords Trust Tenant Referencing Conducted By Letting Agents?

Good morning,

I find the best reference is a bank reference. Unfortunately some banks - Abbey/Santander for one- are no longer willing to give a reference which is a drawback. Some would- be tenants in that case where their bank do not give reference have offered to show me recent bank statements (I would never have thought of asking!) and that seems quite satisfactory as far as regular rent payment is concerned as you can quickly see if they can manage their money if you can see say 3 months statements.

On another matter, I think having to pay every 6 months for insurance re tenants' deposit to Mydeposit is a bit much. I am concerned with how long it takes to get the deposits back from the government's scheme. I am now considering not taking a deposit but taking the first and last month's rental at the start. Most tenants use the deposit previously paid as the last month's rental in any case by not paying it, and not a lot one can do about that.

Any domments or good suggestions on this?
cheers,
Eleri

Hi good article and worth pointing out that a reference is only as good as the work put into it. Social networking sites are a good way of understanding more about a prospective tenants their habits etc. Just a quick and cautious comment on deposits, no matter what you call it, money in advance etc. If you take a double month as suggested previously at the start, this money is considered a deposit under the Housing Act 2004 part 6.
To not treat deposit money in accordance with the Act can be restrictive and costly to the landlord. The inability to serve a Sec 21 notice or if ordered by a court, even having to pay a penalty of 3 times the "deposit" to the tenant.
Lets face it the deposit protection schemes were introduced to promote good practice, have third party resolution to disputes and encourage tenants and landlords to have clear understanding of the condition of premises from the outset. I would advise all landlords to put the work into referencing, and be detailed about inventory and condition of your property.
In my experience the non payment of the final months rent is based on a tenants belief that the deposit wont be returned at the end of tenancy or at least not without a fight.

Good morning,

Thanks for both the comments. Right I will now rethink the two months' scheme if it is still going to count as a deposit. In relation to the point about the last month's rent: what I find is that the tenant wants to use the last month's rent money for the deposit for the next place.re. Deposit money taken in the past I don't find that I need to use it against damage as I have had good tenants in recent years through taking bank and employers' references up, but of course I did hold the deposit so this may well have a bearing on the state of flats when they are vacated!

My Local Authority has just sent me notification that they are going to charge £90 per "sleeping unit" for smaller HMOs: this is going to cost me over £800 unexpectedly payable within 28 days. They say the aim of the scheme is "to increase the protection of tenants" but the minutes of the LA's subcommittee which discussed Mandatory Licensing scheme for HMOs in the first place specified it was a good way of raising money for the council! Any experiences from other parts of the country would be of interest. Seems to be a new tax as officers from another department has previously inspected my flats and found all satisfactory. It is not clear if this is a yearly payment, but I suspect it is. I have always promised my periodic tenant that they will have at least 2 months' notice before any increase in rent is mooted.

Great site Landlord. Thanks
Eleri

An interesting post to say the very least.

Firstly excellent reply by Tom to Eleri, he stole my thunder.

Anyways to the post itself, DIY referencing as an agent can be a pain, and can take one hell of a time when you have to do like 10 per day. Been there dun that and got the T shirt.

Using a ref agency, you can have an independant piece of paper that you can show the landlord clearly states you have used an agency, and not just shirley/shela, or gary in the back office, who might or might not, have made the effort, or who just ticks the boxes cos it was home time!!

Yes I have seen the false refs produced on the home computer.

Previous or current landlord well by that time the tenant is on the move anyways regardless of the reference the landlord chooses to give. It all subjective anyways, as often some of the situation can come down to conflicting personalities.

Overall most tenants are good, and the bad ones skip the agencies who do ref checks anyways, hoping to find a property on Gumtree, with some idiot Landlord who cant be bothered with all that, they just see the ching ching of cash.

I always do my best to get it right, and on the occasion i get it wrong, I always review and see where i went wrong.

Old adage but there is never time to do it right, but always time to do it twice!!

By getting the ground rules right, often you only get the good tenants, not the bad ones.

I must confess I've given notice to bad Ts who for example won't ventilate/heat a property causing mould and when the reference request comes through I'm so tempted to tick the box saying No they haven't caused damage to the property because I need to make sure they'll be rehoused or we could get stuck with them. What I usually do instead is say something like 'Final check-out inspection not yet done'

Wrong I know. *Slaps wrist*

BTW, the referencing company we use say they will only work with faxed or posted documents but we have to trust that they really do it that way....

Here's the thing...when you ask a previous landlord for a reference do you think you will find out if the tenant was evicted or not- and if so for what reason?

If they were evicted, the past landlord is more than likely going to say all was fine, because they want shot of that tenant.

They are not going to give you chapter and verse about how bad they were, because, if the tenant can't find a new place to live then they just might get stuck with them if they decide to become difficult!

Some tenants are great at paying but ruin the standard of your property. Is this a good or bad tenant? Do agents ever ask this question about cleanliness or respect for the property?
I think not.
Take all previous landlord refs with a large pinch of salt.Just because someone pays on time, does not necessarily make them a great tenant. They could cause issues with neighbors and other stuff.
Best way to understand the tenant is to question them yourself. At length.

Agents only care about the money, not the property or the tenant.

There's Agents who care about more than money and agents who don't. If an agent gets a reputation for finding bad tenants the word will soon spread and they'll be shunned by good landlords.

If you use an agent to find your tenants ask them how they carry out referencing. If they do it themselves I'd walk away.

If they use a referencing company ask what criteria they use and how they get their information especially with regard to landlord and employer references. As Roberta says a good credit score is meaningless if the tenants lifestyle means the property is devalued while they live there.

Do they accept mobile numbers for employer and landlord refs? Anyone could be on the end of a mobile phone number. Ours won't and it makes me feel just that little bit more comfortable.

I know its nearly summer when The Landlord starts a writing!

Regarding the HMO Licensing (or extortion by another name) Cardiff were quite upfront when they said they were going to charge £700+ per HMO because they said it was going to fund the proesecution of the slum landlords. What complete bollocks, as is the protection of tenants rights scenario. As the munites said it is a complete money maker - where else can you get large amounts of money with very little input?

For me, part of the process involves the Mark 1 eyeball and I never let to anyone who is larger or uglier than me! Turn up in a souped up Renault Clio or even a hint of chav and I decline. It does not matter what referenences say - many tenants (and yes I know there are exceptions) will not treat your property as they would their own through lazyness, ignorance or just plain stupidity.

I once worked on a house where the owner was a nurse at the local hospital. There was dog crap everywhere and the place was like a hovel so it goes to show how even supposedly sanitary people can live even with good jobs. It's making me thrutch now just remembering it!

Eleri - I use The Deposit Protection Service and they have been fab. Not had any issues regarding damage yet though but I do use a professional 3rd party inventory service.

The Letting Agents I use are to be fair very good at their job and so far, crossed fingers, there has not been an issue or if there has they have sorted it out.

I think that we need to remember that we are their clients and as such we deserve and demand excellent levels of service.

Jools

Good information!

The most tried and trusted are those provided by financial services such as Experian. LetPropertyRentProperty use checkmytenant which is a part of Experian.

Yea one of my tenants moved out and someone called to ask for reference and I could have been anyone they didnt even ask if I was who they think I are...

I know this is bound to be a little bit biased, as I represent http://www.tenantref.co.uk/ but I still believe that tenant referencing has an important role in the letting process. It can be argued that they are just an unnecessary technicality in the letting process, however without them, the regulation of letting and the number of issues from negative tenants would rise considerably. It may not be necessary in some cases, but for most landlords it is an important step in ensuring you are choosing the right tenants for your property. Letting is not just about the tenants being happy but the landlords being happy too.

Ive recently thought of going back into the rental sector, and have come across some alarming things about references. A lot of agencies will have you pay a deposit fee to check these out. I'm guessing if the agency finds there fake you don't get your money back?, what a rip off!

@Chris If you fake your references what do you expect? You're paying to have your references checked. If the agency does that and you fail due to giving false info, the agency has still carried out the referencing work! And agencies who pay a 3rd party to do referencing will be charged whether the applicant passes or fails.

Aunty P, That's not what I was saying, I wouldn't fake my references at all, its not my style.

Merely making the point that charging a deposit for a reference check seems a bit daft if all they do is ring your referee up and ask the above simple questions.

That is an interesting point made. So there are professional firms that check referees out?

I realised my era when I pressed submit button, and couldn't amend it, sorry about that.

Hi Chris, yes, some agencies do their own checks although there are specialist companies who do this. We use Let Insurance who carry out thorough checks on all applicants.

BTW, bank refs are worthless. An applicant could have thousands in their account but that could go out again the next day and doesn't prove they are good for steady income.

I'd beware of agents who do it in house unless they convince me they do it properly. (See my comment number 10 above)

Most referencing is inadequate.

Firstly, any paid for tenant referencing will not tell you if a tenant has been taken to Court. This information is never captured anywhere. For instance, it a Landlord has gone to Court under Section 21 or Section 8. This can never be checked!. Only Section 8, where there is money judgement. But if a landlord went for a Section 21 (possesion) you won't be able to trace it.

Also, haev a couple of tenants who owe money, but the costs of debt tracing and recovery is always money down the drain. So again, this information is lost in the system....

I have never been asked for references for a 'bad' tenant.....

Okay, if you ask for bank references, but people never ask if tenant has outstanding loans!. I was told by one tenant referencing company, even if a tenatn has a 10k loan, will never get to know anything, as long as paying minimum balance everymonth.

hiya am really in need of sum help , am a tenant and am having problems with my landlord, ive live in my flat for 8 yrs and in them 8 yrs ive had 2 gas checks ,had to do with out heating for 2 months a few yrs later no heating and no cooker for 2 yrs , the doors on the outside are not safe and no locks on the back doors , got mould in 2 rooms witch the vents are block as they were like that wen moved in , the drains stink and i cud go on ? ive found out he done the same to one of his other tenants and he in court for it , so i thort id ask help of the enviroment 2 cum have look they had 2 tell him wat they were doing, next thing i know he out being the good guy and send sumone out 2 sort heating (wow if only he did that wen id tryed 2 ring and got no respond )the envioment came out to tell me he not alowed to do that intill he had done his checks so he sent the landlord wat needs doin and leave it at that but still sat waiting ? so i think the best thing is to move and go with agents knowing they keep up wit the work wen needed but they needed a refeance, so i ask him 2 give them one he was ok with that only to be told he said i owe rent and trashed the flat then few day later he phones up saying he give a good refeance and if still not moved he would be out in 8wks to do the work so now am stuck what to do ? as i want to move out but cant coz of wat he said and no one gona take me on ?

Marie, first I am amazed that if this place is so bad that you have stayed so long- is the rent excessively cheap or something?
Second, if you have reported him to the council environmental health officers, he has the power to put an order in place which stops the landlord from renting out or selling the property until works are completed to the standard they require.
You can also try witholding rent until works are complete:
Shelter will be able to give you advice, you can check this article too http://england.shelter.org.uk/get_advice/repairs_and_bad_conditions/disrepair_in_rented_accommodation/repairs_in_social_housing/withholding_rent_over_repairs
http://england.shelter.org.uk/get_advice/repairs_and_bad_conditions/disrepair_in_rented_accommodation/moving_due_to_disrepair

It would be useful to have a review of the various companies that offer tenant referencing. I am a tenant and have been asked to enter bank details etc. on a website that my landlord assures me is safe, but I have no way of confirming this.
As a prospective tenant I am unable to create a fuss if I want the property and have to pay whatever I am told to for "Search Fees" when in fact I am filling in the web forms.
I am not naive enough to believe that this world should be fair, but entrusting all my details to a site I do not know and have no way of reviewing is somewhat like russian roulette.

Sounds like you're still a property idiot. If you don't know who the caller is talking about then say so and get more information. You'll save a lot of people a lot of hassle. The only fool in the above conversation is you.

unless your situation includes things like zero income, or court orders you will always pass these referencing systems as long as you are completely honest. i had one done recently with loads of credit card debt, self employed very low salary and lived out the country for years, etc, etc.... and I passed with a guarantor requirement. I was really surprised.

Kevin, People avoid estate agents and use sites like gumtree to avoid the extortionate fees estate agents charge I don't see you putting your hands in your pockets to pay these.

I find it quite rich landlords on here comment about estate agents are only interested in their fees, all landlords what the bun,icing and the cherry on top, not just happy a tenant is paying there mortgage aswell as earn obscene profits from the rise in property prices you have the cheek to moan you want 110% guarantees on tenants.I will give you the only dead cert in life your going to get and that's your going to die.

Some people need a break in life but unfortunately greed prevents this -If you think some office monkey doing credit credit tells the true story what a sheltered live you have had.

Tom

@Tom,
If you'd ever evicted a bad tenant you wouldn't make such ignorant comments.

I have just served notice on my tenant and he has two months to vacate the property. He has asked me to provide a reference for him. The problem is he has a very bad track record with regard to paying rent on time and this has been a habitual problem for many years.

The issue I have is that if I don’t provide a reference at all then he might just stay in the house, stop paying any rent from then on, and force me to get a court order to remove him. I could potentially lose a lot of unpaid rent if this happened as well as having to wait longer to get the property re-let.

I am reluctant to give him a reference at all. He is difficult, sometimes abrasive, and pays rent as and when he feels (but he always pays). If I state in a reference that he pays his rent on time then I am technically committing fraud and a landlord down the line could, theoretically, take action against me if she/he found out. In addition I might give him a reference and he then stops paying rent up until he leaves because he has got what he wants. In this case could I then contact an agency or landlord to withdraw a reference if he does this?

So what do I do? Lie to get him out or be truthful with the risk that he might go down all guns blazing.

Does anyone have any experience of this sort of problem or comments on this situation?