Teresa O'Brien, Referencing Manager for FCC Paragon, comments:
"It is essential to carry out thorough referencing checks on prospective tenants and this should never be taken lightly. Most recently, we had a case where an applicant had stated on their form that they had been living with family and friends for the last six months.
"As the cut off is six months, normal procedure is that it would not be necessary to obtain the previous landlords reference to complete the file. However, our online/remote system automatically sends out the reference request which, in this case, resulted in the previous managing agent getting in contact to warn about this defaulting tenant.
After much investigation by our handler, it transpired that this applicant had actually been renting a property, not living with family and had a lengthy track record of rental arrears so was vacating their current residence under a court order. Without digging a little deeper, this is something that could easily have been missed causing much future aggravation for the landlord."
With a faltering sales market caused by a lack of lending, the rental market is booming leaving landlords in the driving seat to pick and chose who they rent their properties to. However, all too often letting agents and landlords are focusing on getting 'passed' references back, just to get the property let and not making thorough checks a priority which can have catastrophic consequences.
Teresa continues:
"Once a bad tenant gains possession of a property, landlords face the risk of rent arrears, damage to their property, subletting, conducting of illegal activities and even refusal to leave the property which can take many months to have them removed. The cost of rectifying such a problem can reach in excess of £5000 through loss of rent and court fees."
Before running checks on potential tenants, a landlord must have their permission. Any applicants unwilling to give this permission are unlikely to be ideal tenants anyway. However, it should never be assumed that what is written on an application form is accurate.
Tenants desperate to secure another property will chance their arm and lie about anything from their employment status and undeclared County Court Judgments (CCJs) to running up arrears.
Landlords should use a tenant referencing company to take up references, financial and character checks as appropriate, to avoid making risky decisions regarding prospective tenants.
Careful records should be kept of all information provided by a tenant as false or misleading information could give ground for landlords to seek possession of their property should the situation arise.
