It’s stating the obvious to say that you shouldn’t take potential tenants on face value, but the same can be said for references. That’s why you need to check out what measures your reference provider takes to ensure that the information provided really is meaningful.
Obtaining proper references is the first step in ensuring a successful letting. Not only is this a sensible step, it is something that your insurance provider will require if you plan to take out cover for legal expenses and rent guarantee, as is equally sensible. Most agents outsource this service to specialist reference providers, but these can vary in the depth of service they offer – take the time to find out just what you will be getting.
There are risks involved in letting property including habitual fraudsters, identity theft, unreliable tenants and other potential issues. Growth in fraud means that any information a potential tenant provides should never be taken at face value and should always be investigated by experts in referencing.
Collecting employer references for income validation and previous landlord references is only the first stage in the process of securing a successful tenancy. The next is verification by means of an expert and impartial third party assessment of the suitability of a person to rent property. To be effective, this is undertaken using the latest technology and analytical techniques to obtain and match data from the widest possible sources of records available. These include county court and bankruptcy information, identification checks and validation of bank sort codes - all of which can be carried out on-line.
Referencing is not a regulated activity; so anyone can set up an agency with a line to a credit bureau and supply references that are no more than a quick credit check. Any reputable referencing provider must carry out not only the basic credit checks, but also full identity and fraud checks. It is important to make sure your provider offers the following:
Authentication: tenant screening should include details to make sure that the tenant is who they say they are and that they haven’t either stolen an identity or developed one.
Linked addresses: any search for issues such as CCJs should not just be restricted to checking current addresses. Data searches should look for detrimental information at undisclosed and linked addresses, particularly as failure to disclose an address could well signify that the tenant has something they wish to hide.
Employer’s references: it is necessary to establish whether the tenant is employed with sufficient income to meet rental obligations – but it is equally important to be sure of the source of that information. Employers using personal email addresses, such as Hotmail, or mobile telephone numbers should only be accepted if they have been verified and authenticated with a full audit trail to support. In fact, any employer’s reference should be checked out to make sure that it is authentic.
Tenant history: previous landlord references should include the total history of the tenancy. Even if the tenancy ended with the rent paid up, had there been arrears or any other relevant problems, such as damage to property or complaints from neighbours? A standard three year address history should be obtained and a reference taken from the most recent landlord to ensure that tenants who have, for example, been living with parents for the last year have nothing to hide.
Guarantors: ensure that the verification extends to any guarantor involved. In fact, a guarantor should be as carefully referenced as the tenant themselves – after all, they will be the party that needs to be pursued if the tenant defaults. For this reason, guarantors based overseas should be avoided. If problems arise they will be harder to trace and the laws of the country in which they reside may make it hard or impossible to pursue them or to obtain a recovery.
While you may be anxious to minimise the time between lettings, it is essential that you don’t compromise quality for speed. Your referencing provider must be able to respond quickly to requests, but you need to understand what is required for a comprehensive reference which will help you make an informed decision.
With thanks to Nigel Atkinson, National Business Development Manager: www.propertyrisks.com