OpenRent Community

Requesting Bank Statements - Do you do it?

Hi all

I can see why tenants do not really enjoy providing bank statements as it is quite a personal thing. However I’d be interested to know if you find it acceptable to ask for them?

My view is there various benefits to seeing statements such as they show the tenant paid their previous landlord regular and on time, it shows that what they claim to earn actually hits their bank account, it confirms the address they provide, you may spot any “dodgy debts” and so on.

I use the Rent Now service - who do credit checks etc. But I like the added security of seeing the statements… Is it a reasonable request or should I not ask?

There is of course the subject of GDPR but that’s another subject that can cause endless debate! I am registered with ICO and use all the relevant disclaimers so I’m not worried about that. (I’m NOT saying other landlords must do the same as it’s a very grey and confusing area that I don’t want to get involved in a debate with - I just registered to cover my back for my own peace of mind!)

No I would not ask for bank statements. Its too intrusive. Besides if you reference your tenants then this shouldn’t matter as they will check everything you mentioned (plus a lot more) and flag anything of importance. Having debts is not a problem as long as they pay it off, we all have debts - but referencing will flag this up if important.

That’s a really good point. CCJs and such will show up on the credit reports so I guess I’m being too fussy. Thanks for the advice, I really appreciate it.

I do ask. It’ does put some people off of renting. But it also saves me showing lots of people around/viewing as it acts as an early filter, prior to referencing. But I have never had a bad payer.

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Bank statements are often asked for as one alternative to proof of identity and address. When asked, I provide them myself, but with itemised entries redacted. Asking applicants to display all their personal financial information is unduly intrusive and unfair, as there is no effective control over what happens to that information.

I agree with David. It is, of course, personal but it is directly relevant to reasonable considerations about lending a property. I also entirely agree that it acts as an early filter. The requirement for bank statements in addition to the various details the referencing agency will ask for should be advised as soon as they express an interest but it is courteous to forewarn of your own requirements, perhaps at first viewing.
Play that one by ear.

I always prefer to deal with i.e.view bank statements personally rather than through the refs agency because, frankly, it is often seen as a bespoke request and agencies aren’t keen on it generally. They tick their own to-do boxes and prefer to keep it that way, it seems.
So, you should see bank statements yourself. Six months is sufficient to show, not least, a regular employer or income. If they state they are self-employed, you will require the same while advising the refs agency you want three years of professional accounting, where at all possible. Stated self-employed but no accounts yet…? Highly risky even with rental paid in advance. Pension statements, Premium bonds etc…? No good per se; can be cashed in at any time.

It might be helpful to remind applicants that seeing bank statements prior to formal referencing may save them time and money should you consider there may be an affordability issue. If you take that route… choose your words carefully.
They might as well be in no doubt though, that while a referencing agency ‘advises,’ it is the landlord that makes the decision to accept or decline. Landlords often don’t see it this way. Big mistake, potentially.

Where I do think it would be unecessarily ‘intrusive’ is to insist on retaining originals. Further, I think you should accept sight of copies as they may be downloaded as print-outs, in any event. Don’t push it by insisting on originals. Finally, as a point of etiquette for the inexperienced or insensitive landlord, don’t ‘study’ the statements in front of them, unless the applicants direct matters that way. Place them out of sight in a folder which indicates you aren’t going to lose them! Keep hold of the folder, especially if you are in a public place. If they want them back next time you meet, give them back. You are at liberty to make a further copy although this shouldn’t be necessary.

It is absolutely vital, should you be intending to retain this information -rather than just take a glance at it before handing it back- that you register as a data controller in Property Management with ICO. (Information Commissioner’s Office.)
It costs £35 although may have increased since last year. This protects you legally. To be sued for alleged data protection breaches is too scarey for words. It is a very easy, online process with a helpline should you need advice. Your registration becomes a public record so, where possible, you may prefer to give a correspondence address - such as another rental rather than your home address. A P.O Box is not acceptable.
If using another rental as a corres address, your contract there should stipulate all mail addressed to you is to be promptly advised for collection. In that way, you have done your best to ensure you are contactable (accountable) via that address.

Advising all enquirers in your listing that you are ‘registered as an authorised data handler with UK authorities and therefore conform to the requirements of Data Protection Act’ is impressive, professional and should offer the genuine, intelligent enquirer the reassurance they quite rightly need. You are not compelled to register with ICO every year unless you are continuing to retain personal data. The information on a standard Tenancy Agreement such as full names, previous addresses is reasonable to retain without registration last time I asked ICO that question. Check the latest for yourself though, please. Retention of passport photo page scans, bank statements etc. needs registration due to its level of sensitivity.

In my view, if interested parties have objections beyond all that, it rather answers for me an early vetting question in terms of either affordability, credibility… probably both. What would their objection be? “We don’t think our financial affairs are any of your business.”
Oh, yes they are!
A more reasonable objection might be that they can’t just submit to the refs agency. They can if you are happy with that. I used to be so but bank statements give so much useful information including about lifestyle and spending patterns which the refs agency will not summarise for you that I play it this way now. It is revealing. It is relevant.

It’s a serious business. Their financial situation and track record is the most crucial aspect and carries the greatest risk of all if you are too shy or weak to ask.

Peter B
Member NLA

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No I don’t ask for bank statements. Rent guard do the required checks which then qualifies me to buy the rent guarantee insurance. £90 out of £6000 plus per year is nothing for peace of mind.

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I think that once the tenant fee ban comes into play that there may well be more landlords using bank statements as a way of vetting tenants. It would be risky to just rely on this information, but I’m sure some landlords will do it.

I don’t understand why anyone would use an agency. I used one when I first started this. Biggest mistake I ever made. Never again thats for sure. Open rent do an exemplary job and rent guard do the rest and the rest is up to me. I’ve had no problems since I started doing it this way at minimal cost.

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of course you need bank statements, it should be a must for sure, always

Hi Andrew,

I wish I’d taken bank statements before taking references.
I recently spent £60.00 on references only to have them all fail. Not good.
Now tenants don’t have to pay for referencing any Tom Dick and Harry can apply to rent your property without caring about the cost to themselves. Seeing applicants bank statements prior to referencing could save you in many ways.

Mike.

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Love it . Bank statements and your gut feeling. IF they baulk at this then dont go ahead

Hi mi62014,

so have you now changed something to prevent such time wasters in the future as i have not yet rented since the fees ban, however i have decided on my PROTOCOL which is, take a room holding deposit followed by all their bank/payslips etc and only when im happy with all, then pay for the checks and please do check out the NLA Tenants Checking website as £60 sounds rather expensive i think we can also do a independent cheaper check directly with Experian too which im yet to loo into.
You could even do the LL reference and employer reference pre-paying for tenancy checks.

Hi Andrew,

This was £20 per reference and having all three fail.
I’ve just had a tenant move in whom the local council found for me, still not sure whether that was a wise decision or not, only time will tell.
When I purchased the said property I didn’t realise that it had been empty for two years and the council were charging me double council tax so I was desperate to get someone in it.

Mike.

Have you checked your Lender rules as it must state on your policy if you can rent to that type of tenant & usually doesn’t allow & same with building insurance & public liability etc?

Hi Andrew,

Can you please forward me a copy of the successful gas certificate.

Thanks, Mike.

Hi mi, I don’t understand, what gas certificate?

Hi Andrew,

Just ignore this request.

I’ve had a gas inspection done by someone called Andrew, which was organised through Open Rent. Hope you can understand how I sent this to the wrong person.

Mike.

you will need to refer to emails from OpenRent which they sent to you with the gas engineers details etc and contact them directly, dont forget to ensure that the engineer doesn’t fill out the expiry date of the CP12 wrong if you got the CP12 in advance of your old one though as the Gas engineers dont really understand the rules