Tenant checks – Ask Sharon


 

Tenant checks

  ASK SHARON

Scroll down to find the advice you are looking for. Most recent questions and answers are listed first.


Non UK tenant

We are considering renting our property to a Russian national with a four year work permit. At the moment she works for a temping agency in the care field. She can provide job references, bank references and past landlord references, but we have been informed as she only works for a temping agency she may not pass the credit checks and then we cannot get the rental insurance. What would you advise?

Sorry, I know it is hard, but I would not let to someone who temps and therefore has no job security and for whom you would have no insurance cover. I’d say no, unless she could provide the first two month’s rent in advance. If she can, it may be worth considering.



Bankruptcy and benefits

We rented out our house through a letting agent who we found to be useless, and have now decided to do it ourselves.

Our tenant’s assured shorthold tenancy agreement has ended and we are waiting for the deposit from the letting agent before we start a new one. The tenant is going to declare herself bankrupt and we found that the letting agent had taken her on without making any checks. He said he had asked us first but I do not recall that.

The tenant has been in situ for six months with no problems. Her father was the guarantor for the first six months.

I am concerned that if she declares herself bankrupt this could affect our property – any credit checks against future tenants would probably black list the address. Should we insist on her father being guarantor for the next six months?

The tenant received housing benefits, which I presume will not be affected by her declaring herself bankrupt.

There are a number of issues here:

First, ask your letting agent to verify asking your permission to take on the tenant. He should have something in writing or file notes confirming the conversation.

Secondly, I would ask someone to be the guarantor as a preventative measure. With due respect to your tenant, there are budgeting concerns and you should always protect yourself and your property.

I appreciate your concern over the potential credit repercussions of the tenant declaring herself bankrupt at your property, however bear in mind the main credit reference agencies Equifax and Experian do allow for a notice of disassociation for any future tenants not to be affected by this bankruptcy.

Finally, being declared bankrupt should not affect the Housing Benefit.



Landlord obligations

Do landlords have a statutory duty to give tenants truthful references? What can be done when a landlord gives conflicting references about the same tenant?

Really tricky question, this. There is no statutory duty for landlords to give references at all. However, anybody who gives a reference and has reason to believe it will be relied upon (why else would a reference be given?) has a duty of care to that other person. So anybody who has lost out as a result could consider a legal action for negligence – although the case might not be too easy to prove. Of course, the person who is the subject of references also has rights, and anything that is untrue and damaging could result in a civil claim for defamation and libel – although again, such cases are not easy (or cheap) to pursue.

On the question of conflicting references, it is important to distinguish between what is said as fact and what is opinion. Facts should not change – unless a landlord has made later discoveries – but opinions could very well change over time.

It is said some landlords give false references, purely to get rid of bad tenants – by passing on the ‘problem’ to another unsuspecting landlord. This would be difficult to prove. But landlords who give bad references should remember that they will want to rely on references at some point also, and act accordingly.

Tenants who think they have been given an unfair reference should discuss this in the first instance with the person giving the reference.


Overseas guarantors

We have a brand new flat we wish to let. Our plan was to go via local agencies, however we found there were many similar flats to let and most agents are reluctant to take on ‘new’. We therefore to go it alone, offering the property at a reduced rent.

We received a prompt response, not from the ‘professional’ we hoped for but from an overseas student. Our initial reaction was ‘no way’, but we learnt the student was currently renting a similar flat. Because ours is fully furnished and the other is not, he said ours was more suited to his needs.

We interviewed the potential tenant who told us he had family support that would be sufficient to cover the rent. He appeared to be a well educated mature person and offered a month’s rent in advance and an additional month’s rent by way of deposit.

We are happy to offer a shorthold assured tenancy for six months (which would coincide nicely with the academic term), but I understand even if we don’t renew this the tenancy would continue on a rolling monthly basis.

My question is, while we are drawing up the paperwork how do we go about obtaining references and credit checks? And how do we get a guarantor when the parents are overseas?

Your prospective tenant should be providing references, but credit checks may prove difficult. Speak to the University – does it offer any advice on this.

I suppose I am a terrible cynic and this student may be an excellent bet for the flat, but if in doubt, I would ask for more than one month’s rent in advance. Many students are expected to pay three months in advance, though you may feel this is unreasonable.


Need to serve a summons

Our former tenant broke her tenancy and left us with two month’s rent arrears plus re-letting costs, and damage to furniture. In total we are owed £6,000.

We had requested our rent several times but were told: ‘you have my deposit’. In fact the tenant even wrote (using the tenancy address even though he was no longer there) confirming the amount owed and saying that we should use the deposit. However, this does not cover the amount we are due and we wish to serve the tenant with a County Court summons.

The trouble is that we have been unable to discover his current address. We have tried everything we can think of and even tracing agents have drawn a blank.

Can you suggest anything more we could try?

I am sorry, I am afraid I can think of nothing. If he was claiming housing benefit, the director of finance may be prepared to pass mail on, but could not divulge an address even if known.

Someone must know where he is, the council tax department and utilities companies, for example. But this is one of those situations where the Human Rights Act and Data Protection Act are protecting someone quite unworthy – your former tenant! The only glimmer of hope may be that a landlord in your area may know of him – are you a member of your local landlord’s association? It may be worth some discreet enquiries there, though data protection law will, of course, still apply.


Sitting tenants

I am considering buying a property with sitting tenants. The obvious concern is that it might be being sold because it is the easiest way to get rid of the problem of problem tenants.

What checks should I make about the tenants? What information is it reasonable to ask the letting agent to provide? Would it be necessary (or even possible) to check the payment records? And how much legal weight would a signed declaration from a letting agent, confirming that the rent is up to date, carry? Or should such a declaration come from the vendor?

If you were buying a house to live in, you would want to know how much the council tax was, probably what kind of heating bills you would expect and generally, and the like. Because you are buying this property as a business, you will want to know all of this and more. You should ask to see payment records. You should ask to see the references provided at the beginning of the tenancy. You need to know when the tenants moved in and on what type of tenancy, so you can tell whether you will be able to regain possession easily, should you choose to. The vendor, or the sitting tenants, may not want to show you the things you ask for. Fine. You don’t buy. It is that simple. If the whole transaction is not transparent, ignore what could appear a great bargain – it could turn into a problem you don’t want. By the way, there is nothing to stop you asking the neighbours whether there have been any issues with noise and the like, though you should not ask any details about the tenants themselves, or engage in gossip which could be motivated by an ulterior motive.


Right to see

We let our property through a local letting agent (not a member of ARLA). Whilst the first month’s rent was paid in advance, the latest two months have been late (18 days and 7 days). We were assured by the letting agents that the direct debit had been set up by the tenant, but I am not sure that this was the case.

We put some pressure on the letting agent to sort the late rent our and the direct debit instruction (prior to the third month’s rent being due), but the firm seems to have done nothing and have since given us a month’s notice that the firm will cease managing the property on our behalf (we have been sent the tenancy agreement and keys well in advance of the expiry of the notice).

Since the firm has withdrawn from managing the property so quickly we have also asked for copies of receipts for rent received, which have not been forthcoming (they have told us when the rent was paid and by what means).

We have also requested all references that were undertaken on the tenant. The agent has refused these, citing the Data Protection Act. As the firm was acting as our agents, are we not entitled to see what references it obtained on a prospective tenant? If we should find that the agent did not exercise due diligence in finding a tenant do we have a case for a refund of our £200 tenant finding fee, plus the two month’s management fees, plus any other costs we incur should we need to evict the tenant?

As the agent is not a member of ARLA, it is difficult to see how you could bring pressure to bear. I would ask your tenant to get copies of the references – they surely cannot refuse him. Likewise, the direct debit instructions. The tenant must have some receipts, surely, for what was paid before the direct debit – copy them and if need be, get a rent book from a stationers.

Proving that the agent did not exercise due diligence may be difficult, but you could try the Small Claims Court or a solicitor, but I think it will depend on what the agreement says that you have with the agent.



New landlord

We are first time landlords and had our first tenants and agreements drawn up by an agent. We are now nearing the end of the first year and if our tenants wish to carry on the tenancy. Can you tell me what legal paperwork needs to be completed at this stage?

We are also now thinking of letting our own home out as we wish to travel for a while, leaving our son to manage the two properties. We are hesitant in getting our own tenants for our own home because we have not done this before (not using an agent). Can you point us in the right direction with the right agreements, tenant checks and the like?

You can either issue a new tenancy agreement for another year or six months, or allow the tenancy to convert automatically to a statutory periodic tenancy. The same conditions will apply but if you give a new tenancy, your tenants know they have some security for the period of the tenancy. A statutory periodic tenant only has two month’s security as you can end the tenancy when you like, giving two month’s notice. It really is about negotiation?

How exciting that you are going off travelling, but you really want to be sure that your home will be intact on return. You have started well, in that your son is prepared to manage the property for you.

Tenancy agreements can be downloaded from this site. Add clauses that allow your son to inspect for repairs and saying that the tenancy can be ended by service of a 28 day notice to quit should abandonment be suspected.

You can advertise for tenants, but you need to be really careful who you take as it is your home you are letting out. Try and interview the prospective tenants in the property in which they currently live. Get references and check them out. Try and get one from the last landlord and one from the landlord before that – current landlord may give a good reference just to get rid of their tenants.

Ask for a good deposit – the maximum you can ask for is two months. Ask for the first month’s rent in advance and make sure the agreement says rent is to be paid in advance – if the tenant fails to pay a second month’s rent on the specified date, he or she will be two months in arrears and a notice for possession can be issued using ground 8.

Consider carefully whether it would be better to let the property unfurnished and store your own treasured furniture, ornaments, pictures and other valued possessions. Obviously, do not leave items of any real value in the property – by which I mean decent paintings, clocks, antiques, or anything of sentimental value. Have a good time.


Going it alone

After having bad service from my previous letting agency, I have decided to go it alone, and do all my searches of prospective tenants on my own. Could you offer advice on what I should be looking for?

Sorry you have had a bad time from your letting agency – I am sure most do a good job and make what can be a difficult business seem easy.

Being a landlord is a complicated business and I can do no more than a few pointers here (although my Good Management and Practice Guide for landlords is available via this site at the reduced price of £5.00 plus postage of £4.80.

An agent would ask prospective tenants to fill in an application form – you should do the same – you can draw one up yourself. You should ask for any prospective tenant’s National Insurance number and previous addresses during (usually) the last five years, why he or she moved on, the family makeup of whoever would be living in the property, and next of kin (in case of abandonment).

Have this completed before you offer a tenancy – there may be things disclosed which persuade you not to go ahead. Your prospective tenant can refuse to answer the questions, and there may be perfectly legitimate reasons for that. But if he or she chooses not to answer you cannot risk making an offer.

Get a decent tenancy agreement – you can download one for free on this website. Add clauses covering how the deposit should be paid, what it may be used for, and how it will be returned. Put in something about property inspections in – regular inspection can highlight any problems.

Determine how much rent and deposit you require. If you are prepared to be flexible about the deposit, fine, but agree the amount at the initial interview. A tenant who honestly says he can give £200 cash but not £300, is usually a better bet than the one who is confident he can get £300 and turns up to sign the agreement with only £150.

Ask for references and check them out – last but one landlord is a good one (last landlord may give a good reference to get rid of a bad tenant). Get a reference from a place of employment (obviously only with prospective tenant’s permission) or from a responsible person.

Do a full interview to ensure you are comfortable with the prospective tenant; raise the subject of anti-social behaviour (won’t be tolerated) and of rent arrears (will evict if they reach the level that provides the mandatory ground 8 for eviction – eight week’s rent arrears).

Hope this helps!


Suicidal tenant

We currently have a suicidal student tenant who has tried to kill herself three times since the beginning of April. Her tenancy ends on 31 of July but she has signed a contract for next year beginning 1 September.

We were unaware of her mental state when she signed the contract and now wish to invalidate this continuation. How can we do this?

I think you will have to see a solicitor on this one as I don’t think there is any way you can get out of honouring this agreement. The only other suggestion I could make would be that you discuss the situation with the tenant, tell her you have changed your mind, perhaps suggest you could compensate her in some small way if she would move out at the end of the original tenancy.


Coming from abroad

I have just bought a property to let and advertised with local nursing homes as I know that they have a lot of nurses coming from abroad. Last week I had a call from one such home and was asked if we would furnish the property and increase the rent slightly to cover expenses. I agreed and think that the manager is interested.

I need to know that how will I obtain references for nurses coming from abroad and also if I would need a guarantor – and if so, should I carry out the checks on the guarantor rather than the proposed tenant.

It is generally very difficult to get rent guarantors; however, I think you are in quite a good position, in that you are showing yourself willing to work with the nursing home. References will be difficult for you to obtain – but will the nursing home take the nurses on without getting references itself? I hope not! Put the ball in its court – you are assisting it, how is it going to assist you? Will the home act as guarantor? What deposit can you expect? How long does it want tenancies for? Is it they going to act as manager, interviewing prospective tenants, or will you still do this?

Remember, health workers from abroad are likely to be working here for one reason only – to earn a better wage than at home and send money home. They will probably be decent, hard working people, grateful for a reasonable standard of accommodation and unfamiliar with Britain. I would hope they would be very good tenants, but protect yourself by getting good legal advice on any agreement you come to with the home manager.



Debt collection agencies

We have two tenants who have been living in our house since September 2004 but who haven’t paid any rent since December 2004. We took them to court and won the case. The outcome is that they will leave our house in 14 days and must pay us the arrears, along with some contribution to our court costs. I have some worries that the money may not be forthcoming and was therefore wondering if you could give me some advice on debt collection agencies, and which are the best to go for.

Our local directory has columns of debt collectors in the north west, so you may find the same in your area. See if they will discuss their services with you, what it costs, what they will do to trace him, whether they can do anything, if you have no address.


Tracing former tenants

Our tenant has finally moved out leaving three months rent unpaid – a total debt of some £1,950. Although she has refused to give us her new address we have he email address and mobile telephone number. Meanwhile she has sent us a letter setting out a list of deductions she intends to make from the debt.

As when she was resident she didn’t want us to enter the property and did not inform us of any faults, these are mainly for items of which we had no knowledge and include, for example, changing of the locks several times. She also tells us she is now unemployed so can only afford to pay £35 per month. We doubt very much if we will ever see any money.

My question is how to go about tracing our former tenant and how can we avoid a similar thing happening again? Also, may we pass on the email address and mobile number to utility companies who are also owed money?

I would be very dubious about passing on even the very limited information you have to utility companies except in the most general terms – for example ‘Ms…… was a tenant from……. to…….… At that stage she vacated the property leaving a considerable debt for rent. She refused to give us her new address’.

This will hopefully show the utility company that whilst anxious to help, the tenant must be pursued for the debt from their side. If you had an address for her and passed it on you would be breaching data protection rules/confidentiality – although you could have offered to forward a bill to her. This may see ridiculous, and possibly you would hear nothing further, but where you are dealing with a former tenant such as this one, it is best to ensure that nothing can be held against you.

It is possible that your local housing benefit service will offer to forward correspondence to her, as presumably she now has a new address and is claiming benefit, but of course she has no need to respond – which seems her most likely course of action (or inaction).

If you were able to take her to the small claims court for the debt, the point about the repairs required could be used by her in a counter claim. However, as your tenant signing an agreement in which she undertook to behave in a tenant-like manner, you would make the point about her refusing access and not reporting repairs that were needed. I don’t think she would get much credence for what she says.

The difficulty though is whether the small claims court would accept a case where the address is an email address – you would need to check with your local court whether this is allowable, I think it may not be. Did you take any contact addresses – parents’ address, for example – if so, you may be able to serve something there. Otherwise, you may need to use a firm of investigators – but this will cost, and in view of her statement that she is unemployed, you may get little out of it except for a very few pounds per week and the satisfaction of knowing that with a county court judgement she will have difficulties getting further credit.

How to avoid it in the future? Very difficult to have any degree of certainty, but a few tips are:

– ensure your tenancy agreement says rent is payable in advance. On a monthly tenancy, this means after five weeks and no payment the tenant is two months in arrears and you can issue a ground 8 notice – which requires only two week’s notice. You can make it clear that you will not act on it if the rent situation is regularised.

– Never take a tenant without getting the name, address and relationship of a responsible person. Where possible, get guarantors. Explain at the interview stage that failure to pay rent will result in you pursuing the guarantor. The applicant does not like it, or has no guarantor – then it is not the tenant for you.

– Try and get an additional reference, and check it out.

– Interview any prospective tenant properly before granting a tenancy.

– Consider how much deposit do you require, and get rent in advance wherever possible.

– Discuss how you handle repairs; write into the tenancy agreement a clause about repair inspections every month (but that this will be by prior arrangement with the tenant). Explain that failure to allow access on more than two occasions may result in a notice being issued. If you undertake one visit and find all is in order, you can tell the tenant that you will only inspect if notified of a problem. But if you find anything that points to problems, you can discuss it at the time – this is to safeguard your investment.

– Be open with your tenant – say that if you have to, you will evict, but that you would prefer to discuss any problematical situation and if possible resolve it amicably rather than go for eviction.

 


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