Choosing the wrong tenant can lead to lost income, legal actions and damage to your property. Conducting tenant referencing on prospective tenants is a wise way to ensure a mutually successful experience for you and the applicant, and it is an effective risk management tool. Although tenant referencing does present some costs, taking on a tenant without having performed this reference check carries significant risks and can cost you a lot more money in the long run.Why Conduct Tenant Referencing?
Many applicants do not disclose all relevant information for property managers or landlords to make an informed letting decision. Therefore, consider these advantages of referencing:
- Discourages applicants from hiding or falsifying their credentials.
- Eliminates any uncertainties about applicants.
- Encourages honesty while going through the letting process.
Extent of Tenant Referencing
At a minimum, take a risk-focused approach to determining additional levels of screening, which might include credit checks, identity verification, employment and professional licence verification, fraud checks, electoral roll presence and prior address searches.
An additional level of verification that is essential for a tenant referencing is a credit check. This can reveal crucial information about the applicant’s ability to make payments responsibly. Tenant referencing can include full credit history checks, including County Court Judgements (CCJs), bankruptcies, Administration Orders and more.
Although tenant referencing does present some costs, the wrong tenant can lead to lost income, legal actions and property damage.
Tenant referencing will be more efficient, more valuable and less costly if the application contains certain elements. Such as a statement that all information is accurate and that any untruthfulness or omissions are grounds for termination of the lease/tenancy agreement. One way to streamline the process is to use an online application that requires certain fields necessary for the referencing to be completed. The completed fields can be linked directly to the reference provider’s website, which will extract the necessary information for the tenant referencing. When a need for revision arises, the form can be easily modified.
Using a Tenant Referencing Provider
To simplify the task, you may find it helpful to outsource the process to a tenant referencing service provider. For many screening tasks, outside providers can be faster and more thorough. It is important that when selecting a provider you consider its financial statements and health, its hiring and employment processes, identity theft safeguards and, of course, its service offerings.
Reduce Your Risks with Tenant Referencing For More Help
Contact Sentio Insurance Brokers Ltd if you need more information about protecting yourself from liabilities associated with tenants. Our insurance experts can keep you covered and give you peace of mind.