Hi,
I have found seemingly ideal tenants on paper and IRL. Both tenant and guarantor passed credit checks regarding CCJs, debt, electoral roll etc on RN, but failed affordability. I asked for 3 months recent bank statements from them both and references from previous LL and employers. All refs are glowing and I can see from the bank statements that they can afford the rent (£250 pcm cheaper than where tenant is staying now).
My question is, if I were to buy Mudhut rent guarantee insurance, would have problems if a claim arises, because of the fail via Rent Now? They paid for Equifax refs via Mudhut too, which passed.
Or should I just sack RN off and create my own contracts via the www, in case of any contraindications, in the event of a claim?
Unless you are pretty expert in tenancy law, I wouldn’t suggest you go it alone. If you’re not happy with RentNow and you don’t think this is redeemable, then take a look at some of the landlord associations. They have all the model documents and you would be able to buy third party referencing and rent guarantee insurance.
So I think you are asking if Mudhut rent guarantee insurance would cover your rent if you accepted tenants who had failed Openrent referencing?
Have I misunderstood?
Hi Karl, no you haven’t misunderstood, that is correct. They failed on affordability, but passed everything else and I can see from their last 3 month bank statements that they can afford the rent. I’m still wanting to get rent guarantee insurance as added security though, hence the question. Thanks for your response
I tried to post the link to “Mudhut rent insurance eligibility” page, but its not allowed the link, but if you Google, that must answer the question surely…
Hi David, thank you for your response. I wouldn’t say I’m an expert but I do have a good idea and I rented it out for 12 years, 6 of them by myself with not many problems (apart from when I employed agents, hence going solo). Thanks, I’ll definitely look up the tenant associations, I’ve used them before so thanks for the reminder 
Yes I’ve looked at the T+Cs in detail here is the crucial part:
Affordability checks must be carried out on the tenant by the purchaser or a licensed referencing company, which confirms that the tenant has the reasonable means to pay the rent, i.e. that their income, or combined income for tenancies with multiple tenants, is sufficient to pay the agreed rent in full.
I am the purchaser and I’ve checked their bank accounts throroughly, which are all in order. Further, when I sent the Equifax credit reports to Mudhut, they said they looked fine and that I would be covered.
I guess I’m wondering if they would see the Open Rent checks, should I go through RN and then not pay up, in the event of a claim… But I have 3 months bank statements on record as well as everything else I’ve mentioned…
I’m just being super careful as I’m now a single mum and I don’t want anything to bite me, should it all go awry. Before I rented it out for 12 years with no back up plan - I was very lucky that I never got stung, but now I have more at stake, hence the caution
Why did they fail on affordability with Open rent referencing?
I believe it’s because they have to have 3 x the rental amount in income every month. Most other referencing agencies allow for 2.5. They have x 2. I can see the rent going out of their account every month in the recent bank statements, plus the current LL has given a good reference and also both have excellent credit ratings, so I’m not too concerned. I’m just worried that in the event of a claim, this failure would flag up - you know what insurance companies are like.
Are you confident that the tenant can cover council tax, heating, electric,water, food and other personal costs as well as the rent ?