Who pays for referencing if tenant is at fault

Landlord Discussion
1

so my understanding is that as a landlord you are not allowed to charge any fees to tenants

what happens in the following scenarios where you pay for referencing and either:

it transpires the tenant has lied
the tenant no longer wants to proceed afterwards

do you have to swallow the fees?

2

Yes, usually the landlord has to cover referencing fees. If the tenant lies or pulls out, you typically can’t charge them unfortunately, it’s just part of the risk of letting.

3

Hi @abcd,

Both of the reasons you mention are grounds in which you are able to claim a holding deposit, you can read more about these here.

If the tenant has placed a holding deposit then you’ll be able to claim either the cost of the references, or the whole holding deposit.

You’ll have to provide evidence that the tenant has provided false or misleading information, or that they’re now wishing to withdraw from the application.

If the tenant has not paid a holding deposit, you will not be able to submit a claim.

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4

ok great, thanks for the info!

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5

follow this rule: leave referencing until you have first

  • asked screening questions
  • met them in person and had them view property
  • checked right to rent
  • checked social media accounts/linked in/online profiles if available
  • checked 6 months of bank statements
  • verified employment or benefit status personally
  • got verified reference from previous landlord if possible
  • and if guarantor needed
    • checked 6 months of bank statements
    • checked guarantor owns property

If having done all this, you’re still feeling good, then, and only then, pay for referencing.

Referencing is basically only to confirm what you already know.

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6

i must admit i do things a bit differently

i will do all the following before referencing:

asked screening questions
met them in person and had them view property
checked right to rent

i might do an online search if its easy enough to find but its not something that i do consistently, although i do think its probably valuable

regarding verifying references , employment/benefit status, i normally rely on the referencing to handle this. from whats been said, if they’ve not been truthful it shouldn’t be an issue financially, except maybe if they get a poor reference from previous landlord/employer.

7

As the moderator says, the only thing you can do is take a holding deposit and claim it from them if they’ve lied. You have to comply with the Tenant Fees Act requirements on holding deposits though.

8

indeed… no bank statements? :thinking:

9

This feels excessive to me.

If I, as a landlord was approached for a reference by a new landlord, and then shortly after approached for another reference by the new landlords reference company, I would feel that was excessive.

10

so i ask for bank statements after credit check is complete but to be honest i am really only looking to see if they have paid rent on time, if there is something drastic like negative balance it might catch my attention but besides that since the reference has verified their income and i can see they are paying rent on time, i am not sure what else to look for

11

what if you were aware that one was the LL making enquiries in person and that after the phone call you’d receive a form that was a tick box exercise? And note that as I said “previous landlord” it’s unlikely that the same LL would get contacted by a reference process. That’s more likely to be current LL.

ooh you’d be surprised. Here are some red flags:

  • dipping very close to zero every month (= no safety net for a rainy day?)
  • lots of payments in from friends and family (= not self-sufficient in income?)
  • sizeable payments out to friends/family (= money they’ve borrowed that they’re paying back?)
  • pet insurance payments when claiming to rent without a pet (true story!)
  • loan payments (= debt they haven’t declared to you?)
  • loan consolidation company payments (= so many loans they had to get them into one payment to help manage them?)
  • frequent (and/or large) payments for gambling (= a habit that could turn bad?)
  • car payments when they don’t have a car (= financing someone else? - had someone whose ex had apprently cloned her identity to take out a loan in her name)
  • transfers to bank accounts in their own name they haven’t told you about (= savings?)
  • financial history of income from benefits/employers (=does this match what they’ve told you?)
  • steady growth of balance (= someone who knows how to live within their means)
  • overdraft or negative balance (=run away, run away, run away!)

While looking at statements, I literally highlight any concerns and then have a conversation with the applicant and ask questions. If those answers allay my concerns, all good and on we go. If not, well, thanks but sorry, no.

Edited to add: we’re dealing with people, and people are complicated. Before I let someone live in a property that has cost me a great deal of blood, sweat and tears to buy and maintain, I want to understand who it is I’m renting to. Combined with the initial phone call and meeting at a viewing, the bank statements help me really get to know the complete stranger who for many years could either be working with me to achieve our mutual life goals or who could make my life a living hell.

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12

Like the one about pet insurance

13

Ha! Yeah… you should have heard her squirm when I asked her about it. Needless to say, she didn’t get the place. :laughing:

14

I have a list of questions I ask by email and get the response by email. Then I get the deposit followed by referencing. if they have lied I keep the deposit, done this may times, there are many liars out there. Your doing much the same. PS I now also insist on a property owner guarantor, I am able to because my offering is always good and the queue is long.

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