How to do a tenant background check

Image showing a flat rented after a tenant background check
Performing a tenant background check is critical if you want to avoid problem tenants or other rental problems further down the road.

How Does A Tenant Background Check Work?

A tenant background check is one of the most critical aspects of renting out a property. If you end up with a tenant who is late with the rent or causes damage it can make life as a landlord very stressful.

In this article we will look at some of the actions you can take in order to get the right tenant in your property.

New landlords face a lot of difficulties not least of which is being able to find the ideal tenant. Looking for prospective tenants is not as simple as placing an advertisement for the property. You will probably have your own specific rules about smokers, pets and other points which will be included in your tenancy agreement for England and Wales.

As well as these considerations you will have to comply with the laws regarding discrimination and make sure that your prospective tenant is honest and trustworthy.

Picture of houses which are rented to tenants in the UK
When renting a property as a landlord it is imperative to conduct a tenant background check on your prospective tenants. These can be performed quickly and at a low cost. Photo © Trevor Littlewood (cc-by-sa/2.0)

How To Find Good Tenants To Rent Your Property

How do you find good tenants to rent your property? Most landlords would put being honest and responsible as two of the top qualities they would prefer in a tenant. A good credit score is another element that helps to proves financial stability.

Someone who is clean and tidy is more likely to keep their home in the same state so this also scores highly amongst landlords as a quality to look out for. You can also check to see if the prospective tenant has a criminal record. Screening applicants with a tenant background check helps you to cut down on wasted time with a prospective tenant.

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How To Avoid Bad Or Difficult Tenants

There are several steps you can take to avoid getting difficult tenants. You can put the whole vetting process in the hands of an agency but if you prefer to do the work yourself start with a tenant credit reference.

This will establish whether or not your new tenant is on time paying their bills and has no large unpaid debts.

Getting an employer’s reference is another good step to finding a good tenant and from this you can establish whether your new prospective tenant is in long term secure employment.

Bank references are another source that can help you to establish the suitability of the tenant but for this you will need the written authorisation of the person in question. An alternative is to ask for 6 months bank statements from the applicant.

However, many people may consider this to be intrusive and are likely to refuse. Avoiding prospective difficult tenants requires some research and diligence and there are further tips below on how to conduct a tenant background check.

Image showing a terraced house in the UK where a tenant check was performed.
Apart from tenant background checks always complete your tenancy agreement in front of the tenant before signing the document and renting your property. Photo © Alan Murray-Rust (cc-by-sa/2.0)

Questions To Ask A Prospective Tenant

If you have advertised your property to rent and have received several applications there are some questions you can ask to determine the genuine candidates from the time wasters. The first question to ask is when the applicant wants to move in and if they are single or intend to co-rent. Check how they intend to pay the rent and their annual income.

Ask if they can provide a guarantor if necessary and whether they have rented before and can provide a reference from a previous private landlord.

It is important to establish whether the applicant is aware of any conditions attached to the rental. e.g. no pets, no smoking, no available parking space. These conditions can be included in your tenancy agreement for England and Wales which the tenant must sign.

Also make sure that they are aware of the length of the tenancy and if it is suitable for their needs.

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Try not to pre-fill any agreements, instead complete the tenancy agreement form in front of the tenant with a witness. This enables you to go through the tenancy agreement section by section before signing the rental contract.

You may want to enquire the reason for their move. Finding out these details will help you to decide which applicants are seriously interested in renting your property.

Discrimination And The Law Relating To Tenants

When renting out a property you may feel you have the right to choose your tenants, however there are strict discrimination laws in the UK relating to tenancies. These state that you may not refuse a tenancy on the grounds of ‘protected characteristics’.

Failure to get this right could result in prosecution for unlawful discrimination which could result in a large fine or even imprisonment. It is important to be aware of your responsibilities as a landlord in the UK.

You may not refuse to rent to someone on the following grounds:

  • Race or Age
  • Gender Identity
  • Sex and Sexual Orientation
  • Marital Status or Religion
  • Disability
  • Pregnancy or maternity leave

Renting to a disabled tenant: If your property is not designed to accommodate a disabled person you still cannot refuse the applicant on those grounds

You can refuse to rent your property for other reasons but when turning down an applicant it is best just to say no and not to give a specific reason. Applicants must be screened using the same standards so that the outcome can be seen to be transparent.

Keep this in mind when conducting your tenant background check.

Photo showing a row of houses rented to good tenants
Many landlords choose to rent out their houses or flats using a property rental agency. Although this does cost money, the benefits can make the process worthwhile. Photo © Colin Craig (cc-by-sa/2.0)

Using A Rental Agency To Vet A Prospective Tenant

Your property has attracted several applicants and now comes the process of vetting. If your time is precious and you want to install a reliable tenant into your property you can use a rental agency to perform the tenant background checks.

Although there will be a fee to pay for the service there are some advantages to using an agency when you want to vet a prospective tenant. Well trained staff with knowledge of the process is just one advantage.

A property rental agency will perform the following checks:

  • A tenant credit check
  • Check for County Court Judgements
  • An affordability check with employers reference
  • Check the electoral roll
  • Validation of the applicants bank details

These are the basics that are usually included in a simple tenant reference agency vetting process although you can ask for more in depth tenant background checks if necessary.

Three Important Steps To Vet A Prospective Tenant

There are three important steps when vetting a prospective tenant. Before organising any viewings do a screening process and this will establish which people are genuine applicants and which are serial viewers.

Firstly, you can conduct a phone interview which will help you get a handle on the kind of person applying. Ask a few pertinent questions (in a friendly manner) about their current home, why they are moving and make sure that they understand the rental cost and what is and is not allowed.

Following viewings, the second step is to run references on each applicant where you check their identity and if they can afford the rent.

Finally, a short list of applicants can be taken through the full process of a tenant credit check, tenant background check and referencing from previous landlords and/or employers.

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