Call for standardised tenant referencing

TENANT referencing needs stronger regulation, according to a lettings expert.

At present there is no tenant referencing criteria and landlords, letting agents and tenant referencing companies use their own.

Legal 4 Landlords says tenant suitability is determined using a range of inconsistent checks.

A nationwide poll this year found that 18 percent of landlords never trust a tenant when making a financial transaction, showing they are not confident in financial checks.

Sim Sekhon, director at Legal 4 Landlords which specialises in tenant referencing and rent recovery, said:

“Some landlords choose to carry out thorough research on potential tenants whereas others will trustingly hand over a set of keys after a quick show-around. I’ve spoken to landlords who’ve said they just ‘get a feeling’ whether a tenant is a ‘good sort’. Landlords are putting themselves at risk of all sorts of problems.

“By discovering a tenant doesn’t make the grade at the start can avoid unwanted stress and empty pockets further down the line. When we have to evict a tenant, we often find that tenant references haven’t been carried out correctly. We pride ourselves in how thorough and efficient our tenant referencing service is.”

Legal 4 Landlords which has an award winning tenant referencing department, has seen a 600 per cent growth in the tenant referencing area of its business. It carried out 1500 tenant references in June 2010 and reached 9570 in June 2011.

Sekhon adds:

“Letting a property is a business - you need business protocol in place. They are also a way of protecting landlords, especially from unscrupulous letting agents or referencing companies who could be ripping landlords off with not so thorough checks.

“A standard procedure would give peace of mind and ensure landlords are weeding out any tenants likely to cause problems meeting rent. Sometimes tenants are just taking on more than they can afford. I’d want this flagging up sooner rather than later.”

Sim Sekhon is welcoming the views of landlords on the implementation of a standardised scheme on his blog: blog.legal4landlords.com.

Legal 4 Landlords recommends the following, as bare minimum criteria for by all landlords and tenant referencing companies:

- Credit check – to identify any county court judgements a potential tenant may have

- Utility bill – as proof of previous address

- Photo ID – visual proof of the tenants identity

- Employer reference – detailing start date, salary and status of employment

- Bank statement – detailing income and financial commitments

- Former landlord reference