Teanants failed referencing…

[Doopersuper]

Hi. I know Landlords are all viewed here as pantomime villains but I’m hoping for some advice / just have a few people to talk it through with. We’re letting out a property that pre Covid we used as a crash pad for working in a city but now don’t use. Before anyone jumps on - yes, I’ve let properties before (though a good few years ago) and I absolutely make sure the property is in a state that I’d be very happy to live in too! Young couple have applied to rent it but one of them has received a reference of ‘not acceptable’. They weren’t aware of a problem and say that the debt was cleared a long time ago. They have a good job & income and a reference from their previous LL saying they were great. I really feel for young people starting out in this currently brutal rental market (most of us have been there at some point!) so really want to give them the benefit of the doubt…maybe with a guarantor? Or should I be ruthless and say no in the knowledge there are huge numbers of prospective tenants out there….

You're running a business, op, not a charity.

You can't 'fail' a credit check - do you mean there were undesirable things on there, such as CCJs and/or defaults? And the bad reference is a separate issue (but all adds up to it being a bad idea). In this climate, there are thousands of better tenants out there.

I don’t know any landlord insurances that will cover tenants that have failed referencing!

No good deed goes unpunished, especially when money is involved. There's plenty of renters looking for somewhere to live who would have a clear finance check and good references.

Why are you even considering it? Were you thinking of especially trying to find tenants who you could help? Or just something you really clicked with?

What?! No! CCJ, and you are considering still renting to them? Why?!
I am a tenant and sometimes despair of LL rules, but even I am saying do not rent to these people as you will surely regret it. There must be others out there who will be happy to rent from you and who will pass referencing.

Not a chance. Don't do it OP.

I follow Rick Gannon on Facebook..he had a bad tenant and his previous landlord lied on the reference to be shot of him..

I’ve heard of horror stories of people getting CCJs after not getting a parking fine through, or moving house and missing a bill that wasn’t forwarded. So if they had one I’d let that slide… to get two… nope

Two CCJs. An absolute no. Please trust your misgivings and the advice here

Yep, you’re all right. The risk re insurance and getting a mortgage if I wanted one (bloody hope I don’t with rates as they are!) are enough of a turn off! And yes absolutely- 1 ccj could be explained as an accidentally missed bill/parking fine etc but 2 spells trouble. I think I need to have less empathy - can you imagine it, a landlord trying to be nice😁😆.

Well you are a landlord. I'd get some other mug instead if I was you.

Their previous landlord says they were lovely. But he / she might be a decent human being ? Can't be too careful these days.

If they have paid off the debt then they need to get the credit reference agency to update their records.

Im a tenant, I got myself into a lot of debt pre kids.. have paid all the debt off but my credit history is still poor as it doesn't repair immediately..
If I were to rent a house through agents I would fail a credit check, but one thing I have never missed a payment on is rent and council tax, yes my credit history is poor and I take full responsibility for that.. but my LL has never had an issue with me in the 5 years I've been here I've always paid on time and the house is kept at a higher standard than when I first moved in! I know not everyone is the same, but there's some tenants who fell into trouble in the past but will not rip you off!

Too risky, especially as they did not alert you upfront. There are lots of credit worthy people out there. Why take an unnecessary risk? When DC rented at university and on graduation all the parents acted as guarantors and when they were at university we shared out the bills so we paid those directly too. No risk for the landlord.

Read it from a different perspective. They’ve got a great reference from their most recent landlord but they failed the credit check?
A previous landlord would not have any need to falsify a reference (I know some do this to get rid of nightmare tenants) - I would consider it BUT I would get a guarantor just to cover all bases. A lot of people were affected by COVID and fell behind on bills due to reduced income this will have an impact. If they have a solid income now and can prove that they can afford to pay the rent plus other costs then no reason why to reject.

We took a tenant who failed the check BUT we had a guarantor in place and checked our landlord insurance was happy to still provide cover for unpaid rent (they were with the guarantor in place). We had to pay for additional credit references fir the guarantor as well and this can't be charged back to the tenant. However so far 18 months on and the place is kept in good condition and rent always paid in full on time.

Don't do it! I'm an (accidental) landlord; I ignored a CCJ 'to be nice' and after 6 months he stopped paying the rent. Took 9 months to evict him. Lesson learned!

I did rent to someone with a CCJ and it turned out ok, but difference was she was transparent about it at application stage- basically her husband ran off 2 years previously and left her and she didn't have a job so defaulted on CT-not really her fault. Since then she'd started work and even though she defaulted on CT she'd never defaulted on the rent so I took a view on it.To be fair that was also a few years ago when there were fewer choices of tenant.

They’ve come back with a pretty cast iron guarantor (high net income and would be professionally impacted if they didn’t fulfil their obligations)…. Tempted to give them benefit if the doubt, but also can’t afford to get it wrong! To be honest I’d like to be shot of it but dh (sensibly) points out there may be a time we need it again…

You’re issuing then 12 months credit for the rent plus another £7500 + damages to property.

if they move in and don’t pay a penny, it’ll take you 12 months to get them out and cost £7500. Plus the place will be trashed.

do you want to do that?

I always get a guarantor who is a homeowner - usually a parent on all my tenancies - before I started to sell them all.

Check the land reg, if guarantor is a homeowner, and the AST indemnifies you against eviction costs and other losses you might want to go for it.

but ask yourself, isn’t there anyone else to rent it to?

if not why not?

@Doopersuper if you do it, I would use a company for referencing that offers a rent guarantee service. They will step in straight away pay the rent to you if they rent isn’t paid and they chase the debt themselves.