How Does A Tenant Background Check Work?
A tenant background check is one of the most critical aspects of renting out a property. If you end up with a tenant who is late with the rent or causes damage it can make life as a landlord very stressful.
In this article we will look at some of the actions you can take in order to get the right tenant in your property.
New landlords face a lot of difficulties not least of which is being able to find the ideal tenant. Looking for prospective tenants is not as simple as placing an advertisement for the property. You will probably have your own specific rules about smokers, pets and reliability.
As well as these considerations you will have to comply with the laws regarding discrimination and make sure that your prospective tenant is honest and trustworthy.
Qualities Of An Ideal Tenant
What are the qualities of an ideal tenant? Most landlords would put being honest and responsible as two of the top qualities they would prefer in a tenant. A good credit score is another element that helps to proves financial stability.
Someone who is clean and tidy is more likely to keep their home in the same state so this also scores highly amongst landlords as a quality to look out for. Finally, you can check to see if the prospective tenant has a criminal record. Screening applicants with a tenant background check helps you to cut down on wasted time with a prospective renter.
Avoiding Difficult Tenants
There are several steps you can take to avoid getting difficult tenants. You can put the whole vetting process in the hands of an agency but if you prefer to do the work yourself start with a tenant credit reference. This will establish whether or not your new tenant is on time paying bills and has no large unpaid debts.
Getting an employer’s reference is another good step and from this you can establish whether your new prospective tenant is in long term secure employment.
Bank references are another source that can help you to establish the suitability of the tenant but for this you will need the written authorisation of the person in question. An alternative is to ask for 6 months bank statements from the applicant.
However, many people may consider this to be intrusive and are likely to refuse. Avoiding prospective difficult tenants requires some research and diligence and there are further tips below on how to conduct a tenant background check.
Tenant Background Check FAQ
How Do I Find The Ideal Tenant?
Look for someone with a stable job and make sure that they are entitled to live in the UK. Perform background checks to establish creditworthiness and reliability or get an agency to do these for you. If necessary ask for a guarantor to secure rental payments.
What is a tenant background check?
Vetting or screening a prospective tenant is the process of checking their identity, financial stability, employment and any criminal record. You can perform the checks yourself or pay an agency to process the tenant background checks on the applicant.
What Does A Tenant Credit Check Show?
A tenant credit check will show all the data in the public domain about a prospective tenant. The record includes if they are on the electoral roll, any county court judgments and bankruptcy records. The data will also include the full name and current address on record and any significant debts.
Questions To Ask A Prospective Tenant
If you have advertised your property to rent and have received several applications there are some questions you can ask to determine the genuine candidates from the time wasters. The first question to ask is when the applicant wants to move in and if they are single or intend to co-rent. Check how they intend to pay the rent and their annual income.
Ask if they can provide a guarantor if necessary and whether they have rented before and can provide a reference from a previous private landlord.
It is important to establish whether the applicant is aware of any conditions attached to the rental. e.g. no pets, no smoking, no available parking space. These conditions can be included in your assured shorthold tenancy agreement which the tenant must sign.
Also make sure that they are aware of the length of the tenancy and if it is suitable for their needs.
Relevant information: Do I need a tenancy agreement form to rent property?
Try not to pre-fill any agreements, instead complete the tenancy agreement form in front of the tenant with a witness. This enables you to go through the tenancy agreement section by section before signing the rental contract.
You may want to enquire the reason for their move. Finding out these details will help you to decide which applicants are seriously interested in renting your property.
Discrimination And The Law Relating To Tenants
When renting out a property you may feel you have the right to choose your tenants, however there are strict discrimination laws in the UK relating to tenancies. These state that you may not refuse a tenancy on the grounds of ‘protected characteristics’.
Failure to get this right could result in prosecution for unlawful discrimination which could result in a large fine or even imprisonment.
You may not refuse to rent to someone on the following grounds
- Race or Age
- Gender Identity
- Sex and Sexual Orientation
- Marital Status or Religion
- Pregnancy or maternity leave
Renting to a disabled tenant: If your property is not designed to accommodate a disabled person you still cannot refuse the applicant on those grounds
You can refuse to rent your property for other reasons but when turning down an applicant it is best just to say no and not to give a specific reason. Applicants must be screened using the same standards so that the outcome can be seen to be transparent. Keep this in mind when conducting your tenant background check.
Using A Rental Agency To Vet A Prospective Tenant
Your property has attracted several applicants and now comes the process of vetting. If your time is precious and you want to install a reliable tenant into your property you can use a rental agency to perform the tenant background checks.
Although there will be a fee to pay for the service there are some advantages to using an agency when you want to vet a prospective tenant. Well trained staff with knowledge of the process is just one advantage.
A property rental agency will perform the following checks:
- A tenant credit check
- Check for County Court Judgements
- An affordability check with employers reference
- Check the electoral roll
- Validation of the applicants bank details
These are the basics that are usually included in a simple tenant reference agency vetting process although you can ask for more in depth tenant background checks if necessary.
Three Important Steps To Vet A Prospective Tenant
There are three important steps when vetting a prospective tenant. Before organising any viewings do a screening process and this will establish which people are genuine applicants and which are serial viewers.
Firstly, you can conduct a phone interview which will help you get a handle on the kind of person applying. Ask a few pertinent questions (in a friendly manner) about their current home, why they are moving and make sure that they understand the rental cost and what is and is not allowed.
Following viewings, the second step is to run references on each applicant where you check their identity and if they can afford the rent.
Finally, a short list of applicants can be taken through the full process of a tenant credit check, tenant background check and referencing from previous landlords and/or employers.
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