I am a newbie landlord. I have read instances on the forum where openrent’s referencing system have accepted fake references etc. I was wondering what referencing platform people use and recommend? I know experian, RLA have their own referencing platforms to name a few.
For the referencing process, I have asked for bank statements, salary slips and will be contacting employers myself as well. I will perform right to rent checks. The references from landlords is harder because not all tenants are able to provide these for legitimate reasons (home owner, living with friends or family previously etc). For example, one interested person has lived with friends (as a paying guest) or family for the last four years. She can provide a tenancy reference from a landlord four years ago but no one recent. Otherwise she is a good candidate (professional, decent salary, well presented). What would experienced landlords do in this situation - reject them outright or accept the risk of not having a landlord reference (which would exclude a significant number of interested parties)
The main reason I changed from using a letting agent to open rent wasn’t the £600 I saved as that’s peanuts after the tax deduction. No it was the fact that the referencing process is totally in my hands and I’m far more motivated to dig much deeper into a persons circumstances than a busy letting agent chasing the commission. I still use the £20 reference but that’s only to find out if they have had CCJs , IVAs , Bankruptcy and their overall credit score . I still accept people with these as long as I think they can afford to pay the rent and more importantly they declared these upfront . Any lie and it’s a definite no. Im far more motivated than the letting agent to chase up employers ,study bank statements and the hardest of all ie try to get info from previous LLs.
My advice is
They must be prepared to give you 6 months bank statements with every incoming and outgoing amount not just end of month balances . There is no point just getting someone’s income from a P60 or from their employer if their outgoings to service credit cards ,car loans ,ex wives, school fees , IVAs online gambling habits etc etc are eating up most of that . As far as I’m concerned they could be earning £1m a year but I still wouldn’t have them until I’ve seen what their outgoings are. Ask for proof and origin of any savings . If they have not managed to save anything but are wanting to take ver your property by borrowing the first months rent plus the deposit off someone then how long do you think it will be before your rent doesn’t arrive and the excuses start or the phone isn’t answered . My prediction would be 4 weeks or 8 at the most .
Don’t immediately trust a P60 they can be forged and I’ve had a few of those . You have to cross check with the employer and that’s on the phone not by a letter the applicant passes over ( I’ve had those forged too)
Be very wary of the ‘employer ‘ or ‘Previous LL’ who you can only speak to on a mobile phone the applicant passes to you .it’s often their mate or a relative that’s a party to the deceit .The thing that works against them is they are usually thick and get twisted up with their stories in just a minute or two. Landlines are much better to confirm employers are genuine and a copy of a utility bills/ council tax statement for the previous rented property can soon catch out the mate posing as a LL. First question i would ask the ‘LL’ would be what’s the postcode of the previous rental property . I reckon that 90 % of bad tenants are totally avoidable with due diligence and the rest are good tenants who we do take on but after that life then deals them a really bad hand and with those I’m very patient and sympathetic as long as they stay engaged and don’t start lying to me .
Thanks all - @Colin3 I see on some previous posts you have recommended experian tenancy checking. I have just been informed by experian that they do not offer this service any more. Which do you use now or are they all the same (ie it does not matter)
I did not know they had .stopped! I have also used openrent services. Mostly I have my own set of questions and a Gut feeling that comes with years of dealing with customers. However I still make mistakes. No system is perfect. !!! Certainly not me.
It is a good idea to join the NRLA for proper guidance through the process and in the correct order. e.g. privacy policy notification, data sharing consent prior to commencement of the referencing . Also the aspect of the handling of the holding deposit…No business insurance will offer you rent guarantee if the Tenant has not passed their referencing.
There are a few options out there if the prospective tenants have not passed the referencing such as HOUSING HAND (check website), some Local Authorities also offer Landlord Insurance tailored for prospective tenants with poor credit that secures your rental income and any damage / dilapidations to property. Housing Hand also serves the purpose for tenants who have not passed referencing but the tenant buys the Insurance not you. Importantly listen to your instincts. Hope this helps.
JUST TO ADD:
If you are taking on benefits tenants, you must check with your buildings Insurers as they may not cover you . Again there are specific buildings Insurance companies that accommodate benefits claimants…
When you are about to commence referencing, this is to inform them that their personal information will be passed on for the purpose of referencing and afterwards when the Tenancy application is successful with C.Tax, Utility companies, Housing benefit/ DWP if applicable Deposit protection , Right to rent etc. The content is on the Notice itself and you may add on if necessary e.g if you will be using housing hand, work men in future etc.
The privacy Policy MUST also be served prior to commencement of referencing to reassure any prospective tenant that you will reference that their information is secure, the policy also confirms who you are, that you are registered with the ICO, how long their information will be kept for, even after the tenancy, how you will dispose of it, store it .
In PDF format
Tessa Shepperson has a great template on her website that you can download
Do not serve it as a clause in contract but as its own document
David Smith has a great lecture on youtube and the Landlord Law series
Also check if they are on linked in as lots of good employment information there.
I vary my referencing process depending on the potential tenants and their stated circumstances. The openrent/rentguard referencing is fine up to a point but they do not follow up anomalies or where information may be incomplete they just summarise the info they’ve collected.
If you can confirm their credit rating, employment income, current address and payments of current rent, if any, and your gut feeling says that they will be good tenants then go for it. If you use openrents process for referencing still send your own application so you know the landlord/ employment details that you can follow up yourself if you think you need to.
Always get the deposit & 1st months rent upfront. If they can’t pay that then they will struggle if there’s the slightest knock to their income.
Thanks for the replies but I still don’t know the answer to my question. I have applied to register with the ICO. Do they tell you how to serve this “data notice”? In what form does it come ?
You register as a data controller and pay £40 per year or £35 direct debit
Data information notice is served by you
That is nothing to do with the ICO
You serve it in advance to your contract ( alongside your document)
You can download templates from the NRLA or Tessa’s website and adjust for your needs
I would advise you to listen to the lecture below
Tessa’s template has all the requirements that were raised in the lecture
Always insist on a Guarantor, it will reduce your pool of Tenants but will be worth it. Also, you can get Free professional advice from (3rd party referral / service removed)
Could you please suggest how can you use ICO to access information about candidate tenants? I also registered with ICO but this doesn’t mean they will relieve information without a good reason. In one occasion I have to explain exactly what happened and the reason why we are looking to retrive information. The person in question caused damage to our property and ICO has been very awkward. What your experience?
