Tenant who has been bankrupt - should I consider it?

twink1108

I am a first time landlord letting a flat, and have shown a few people round, none of whom I have had a real feel for.

Today, I showed someone round who is employed with a big company, and seemed perfect - except for 2 things. Firstly, they have been bankrupt a couple of years ago due to a relationship breakup. Secondly, during this relationship, they were actually living in a mortgaged property, so they will not have landlord references available (when the relationship broke up, they moved in with a family member, so have never actually rented before).

Has anyone got any advice on giving someone like this a chance - I really did like them, and as mentioned, they are working full time now. I am unsure of whether or not it is a bad idea?!

tattycath

When I first started renting I got character references as opposed to references from a previous landlord.
HTH

G_M

You will have to use your judgement, as well as compare this applicant against others.

Many LL would take the view that they do credit checks/referencing for a reason, and therefore they don't ignore the results.

Others will look at an applicant 'in the round', and apply a flexible approach to their decision.

In this case your difficulty is (I guess) that you only have the applicant's word for the reason for the bankruptcy. And hence only his word that he is in fact responsible, and normally able to handle his finances.

Similarly, I'm guessing you only have his word about living in his owned home and then with family (as opposed, for example, with having been evicted elsewhere for non payment of rent).

It's a character judgement, unless you can verify his stories.

Billie-S

twink1108 wrote: »

I am a first time landlord letting a flat, and have shown a few people round, none of whom I have had a real feel for.

Today, I showed someone round who is employed with a big company, and seemed perfect - except for 2 things. Firstly, they have been bankrupt a couple of years ago due to a relationship breakup. Secondly, during this relationship, they were actually living in a mortgaged property, so they will not have landlord references available (when the relationship broke up, they moved in with a family member, so have never actually rented before).

Has anyone got any advice on giving someone like this a chance - I really did like them, and as mentioned, they are working full time now. I am unsure of whether or not it is a bad idea?!

Yes, definitely give him a chance. In my opinion, many BR people (not serial offenders or people who start companies and do BR after BR,) but just ordinary folk, will now be free of debt and will pay the rent fine. TBH they are no more likely to not pay the rent than anyone else.

Not everyone who has gone BR is a bad egg. Sometimes, it's down to circumstances and situations in life, and it sounds like he is one of these cases. Especially as he had a marriage breakdown.

Give the guy and break,. and I hope you'll be very happy together!

You sound like a decent sort, and I can understand your cautiousness, but I have a hunch this guy will be a good tenant.

theartfullodger

I had a tenant who went bankrupt whilst being my tenant.

They were very aware they needed to be careful & not get evicted for breach of tenancy & make sure they paid rent in full on time.

Consider this person seriously: that they've told you about things I'd say is a good sign. Get a full credit check to see if there are other problems not mentioned - yes I know you'd expect them to fail, you just want to find out eg are there CCJs, does he work where he claims to etc etc etc

chanz4

letting agent credit checks are floored, they only check public data so you could have someone with loads of defaults and never detected.

give them a chance

lindsaygalaxy

I am a discharged bankrupt. I have never once (or before the BR) not paid my rent. We are mostly not bad people, just made bad choices at some point in our lives but learnt from it.

malcolmffc

How about giving them a probationary 6 month fixed term initial tenancy to begin with and issuing a S21 at the very start if the tenancy to protect yourself. You can always withdraw the S21 and give them a longer contract if everything works out.

Old_Git

when I first started working I was on a six week course with a company .
LL didnt know it was a six week course .One week after the course ended I got a full time job .
I had no credit history so credit checks wouldnt have been any good.

If you like him give it a go.

gordonbennet

Certainly don't rule them out, but do do a little extra homework. Speak to their employer to check they DO work there and are paid what they say they are. Ask "will they be employed for the foreseeable future"

Ask to see the potential tenants recent bank statements. (I know it feels like quite an invasion, but you are potentially taking quite a risk here). Are they living within their means? Do they have any other large outgoings? Is there enough spare cash every month to cover the rent?

Consider seriously asking for a guarantor.

tumbledowngirl

I'm assuming getting RGI wouldn't be possible?
How about a guarantor?

From my limited experience as a LL, the phrase "better the devil you know" springs to mind - this person has flagged up his not-perfect history...which is preferable to taking on someone who appears to be a good tenant but you find out too late they are as dodgy as hell (as we are finding out, to our cost).