How to Undertake Tenant Background Checks

Are your tenants all they seem to be? It’s a critical question. You rely on your tenants to treat your property with the care and respect it deserves and to pay their rent on time. Your relationship with your tenants depends on mutual trust – and to have some reassurance of that, you will need to undertake a tenant background check.

About Us

Effective tenant screening is one of the prerequisites for the comprehensive security and reassurance granted by our Rent Guarantee Insurance.

Our policy typically protects you against tenants who fail to pay their rent, as well as covering the legal costs involved in pursuing those rental arrears or legal proceedings for their eviction. (Policy limits apply).

To provide that level of protection, of course, both you and your insurer rely on adequate tenant background checks having been made at the outset.

 

The purpose of the vetting process is, broadly, to establish two main characteristics: the financial status of a prospective tenant to establish the likelihood of their paying the rent when it falls due; and, the personal values and reliability of a tenant who will treat your property, neighbours, and those around him or her with respect.

 

Credit checks

Your buy-to-let business depends upon your tenants paying the rent when it is due. To give you a better understanding of your prospective tenant’s financial position, you will need to obtain (with their permission) a credit check from one of the credit reference agencies, which must be classed as at least satisfactory

There are several main agencies including Equifax and Experian – and their reports will confirm the tenant’s name and current address, as well as any history of insolvency or County Court Judgements (CCJs).

 

References and background checks

If you want to know how anyone is likely to shape up as a tenant, one of the best ways of finding that out is to ask a former landlord. That is why we require you to get a reference from the previous landlord (where applicable). This will show you whether the individual has been a good tenant – or if there have been issues with the landlord or the neighbours.

We also require policy holders to take up a reference from the prospective tenant’s employer for confirmation that their income will be sufficient for meeting the rent.

 

Guarantors

If the tenant’s income is not at least 2.5 times the annual rent, or you have any doubts about their financial stability, you would need to ask the tenant to provide a guarantor who would accept responsibility for paying the rent if the tenant were to default.

Guarantors are usually family members or friends of the prospective tenant and typically own their own home.

 

Country Court Judgements

In order to be covered under our policy, you would need to check that the tenants do not have any County Court Judgements (CCJs) against them in the last three years, and non-outstanding, and no previous bankruptcies.

 

Right to Rent

As the landlord, you are under a legal obligation to check that any prospective tenant has an immigration status granting them the Right to Rent in England. More information can be found on the Government website.

You should check at least two forms of identification for the tenant(s), including at least one with a photo.

 

Summary

Except for the Right to Rent, you are not legally required to carry out tenant background checks, but in order to take out our policy you would need to complete all the Tenancy Check requirements that we list.

These are prudent if you want to ensure – as far as possible – that any prospective tenant is going to be responsible; treat your property with care and respect; not create any nuisance for you or the neighbours; and pay the rent in full and on time. At a time where there is growing uncertainty about the rising costs of living, it makes sense to give yourself the assurance that you will have income coming in if for whatever reason the tenant fails to pay their rent.

 

Get Rent Guarantee Insurance from Protectivity

 

 

*Disclaimer – This blog has been created as general information and should not be taken as advice. Make sure you have the correct level of insurance for your requirements and always review policy documentation. Information is factually accurate at the time of publishing but may have become out of date. 

Recent Blogs

Opportunities for freelancers in corporate hospitality Image

Events

Opportunities for freelancers in corporate hospitality

Corporate hospitality is one of the most rewarding and lucrative areas of the events industry. From sporting fixt

Why your small business needs a niche Image

Business

Why your small business needs a niche

Why smaller can be smarter If you’ve ever tried to appeal to everyone, you’ll know it’s a bit like shout

How to set up a home hair salon Image

Business

How to set up a home hair salon

With the rising cost of renting salon space, more hair professionals are exploring creative alternatives and one

Holding a pop-up event: a useful guide Image

Events

Holding a pop-up event: a useful guide

Pop-up events  have become one of the most exciting trends in the UK event and retail scene. From temporary shop

Why mindfulness and meditation therapy is in demand Image

Therapists

Why mindfulness and meditation therapy is in demand

Across the UK, meditation and mindfulness are no longer fringe interests, they’ve become essential tools for ma

Sports therapy and massage careers: A guide to your future in the field Image

Therapists

Sports therapy and massage careers: A guide to your future in the field

In today’s health-conscious society, careers in sports therapy and massage are more relevant than ever. Whether

The rise of pop-up barber shops Image

Starting a business

The rise of pop-up barber shops

If you're a freelance barber in the UK looking to grow your business, reach new clients, and stand out in a compe

Why aromatherapy is a rising trend for holistic therapy Image

Therapists

Why aromatherapy is a rising trend for holistic therapy

In recent years, there’s been a noticeable shift in how people approach their wellbeing. Clients are no longer

Costly home and garden renovation and maintenance mistakes Image

Trades

Costly home and garden renovation and maintenance mistakes

Experts reveal some of the most ‘costly’ home and garden renovation and maintenance mistakes that homeowners

How much can you earn running an ice cream van? Image

Caterer

How much can you earn running an ice cream van?

Thinking about running an ice cream van? You might be wondering: Is it worth it? Can I actually make a decent liv

Simply find the insurance you need.