The policy document for open rent insurance states you need the following:
a written reference from a current employer which confirms gross annual salary and a permanent employment
status (if the tenant or guarantor is self-employed, proof of income for the last 12 months must be provided by
their accountant or legal representative);
BUT when using the referencing service it seems to skip this part if tenants can prove their employment via open banking.
Where does this leave us?
Hi Neil, I have never opted for the Open Rent insurance but I believe as part of the rent now process, once reference is completed, if you choose to proceed with the tenants it confirms whether or not the tenancy will qualify for Open Rent insurance. Whilst I have never taken out the insurance, I am sure I have had both occasions where it has informed me that I do and do not qualify.
So after referencing, if it offers you insurance I believe your tenancy will qualify.
With regards to referencing employers, via Open Banking, if there are 12 salary payments into the account that is a good indicator that the tenant is in employment. What it does not prove is if that is permanent or not but the advantage is that it does indicate that they are in 'regular employment’which in some cases could be better that confirmation they are in permanent employment (e.g they were only made permanent a couple of weeks ago).
Whilst very often the term ‘pass’ or ‘fail’ is used, the referencing is a process of gathering information. There is no pass or fail, as a landlord you can set your own ‘minimum level to proceed’ but if you want to have the Open Rent insurance, your tenants will need to meet Open rents minimum standard.
The Open Rent referencing (comprehensive) checks both Open Banking and Employers reference via email and usually both are completed.
I believe only one is needed in order for referencing to pass on the system.
Once you have passed referencing on OR system, it then allows you to purchase the legal insurance.
I’ve had tenants fail verification on open banking because they have just received pay rise and weren’t earning the higher amount over last 12 months, but pass referencing due to employer confirming new higher salary.
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