How to screen a Rental Application
A robust rental application process is the first defence against the horror of rent arrears.
Rent arrears cause so much Landlord pain, and one of the two tenant obligations (the other is to look after the property), but what can we do to avoid, minimise and reduce the risk of rent arrears? An indepth new tenant application review.
Many rental application checks can be done and should be done before any letting of a property. Should you have an interested party who is premeditated not to pay the rent or rip you off, they will most likely not complete the actions as to carry them out will be too much work on their part which they know they will have very little chance of passing.
We have listed some of these below and would encourage you to complete as many as possible.
Credit check
A credit check can be a genuine hurdle for many tenants, but please have the potential tenant(s) complete a ‘statutory credit report,’ which is free to obtain. This report will help you verify their details and see if they have had financial difficulties. Several websites offer this service, like https://www.creditkarma.co.uk/, which is free.
Bank statements
If you do not wish to be as invasive as a credit check, an alternative may be to view your prospective tenant’s current account bank statements over the last few months. Here you can confirm evidence of regular and stable income and proof of regular rental payments to their current Landlord.
Proof of identity
Ask tenants to provide, and keep a copy of identification such as a driving licence or passport. National Insurance numbers are also worth collecting as they are beneficial when pursuing any tenant who has left you with a shortfall.
Check residence status
For overseas tenants from outside the EU, ask to see a copy of their visa or residence permit to ensure that they are entitled to be in the UK.
Check for previous on the First-tier Tribunal for Scotland (Housing and Property Chamber)
Eviction and civil proceeding decisions are available on the tribunal’s website. Always look into the detail of any case, as sometimes the tenant will not be at fault. https://www.housingandpropertychamber.scot/evictions-and-civil-proceedings/eviction-and-civil-proceedings-decisions
Employer/pension provider/accountant reference
This evidence should detail their job title, contract duration, and annual income. If the tenant is on benefits, consider asking for proof of their benefit entitlement.
Proof of address
Ask for proof of their current address, such as a utility bill, driving licence, or bank statement. Search this address on the Landlord register to see if it is a let property, and if so, request a reference from the Landlord.
Landlord reference
If the tenant has lived in rental accommodation, obtain a reference from their landlord/letting agent.
A reference should state the tenancy dates, monthly rent due, details of any arrears, whether the property was clean and tidy, if any deductions are expected or deducted from their deposit, and whether there were any problems with anti-social behaviour or other breaches of the tenancy terms.
Please do not use this reference alone as a reason to let, as we have seen fake documents, and the current Landlord may be overly motivated to move the tenant on and may not tell the whole truth.
Consider visiting the tenant in their current home.
A home inspection is only sometimes possible or appropriate. Still, some landlords find it helpful to discover more about the tenant and how they will likely look after their property.
Social Media Profiles
Should you be looking for a non-smoker with no pets and the prospective tenant has public photos of them smoking and holding a dog, there may be an issue, it could be an old photo, but it may be worth discussing.
Chasing up
Should your rental application be slow to receive, do not chase this up.
The applicant may be slow for a reason, i.e., they do not wish to apply due to not thinking they will pass an application due to them knowing the personal issues, and chasing up may encourage them to try to push an application through. Secondly, if an applicant is slow to respond, you can guess that communication speed will not improve if a tenancy proceeds.
Guarantor
You may feel more comfortable having a guarantor in place.
A guarantor is a third party, such as a parent or close relative, who agrees to pay rent if the tenant doesn’t pay it and meets any other obligation the tenant fails to satisfy.
Landlords can take legal action to recover from a guarantor all missed rent payments and any other amounts due to the Landlord, which the tenant must pay under the tenancy agreement’s terms.
You should follow the above steps on the guarantor and sign a guarantor form to demonstrate their agreement to risk.
When checking affordability, give special attention to affordability as the guarantor may have their accommodation to pay for; a secondary property, i.e., yours.
Should you have any questions, please call on 01315107590 or visit our website https://winwinpropertymanagement.co.uk
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