Any law on tenant referencing? (How many applicants at once)

Pixie5740

Chrysalis wrote: »

The issue is letting agents rather than landlords. I let direct from my landlord and as if by magic have none of these fees.

It costs a letting agent £2 to do a credit check but they charge something like £50-100 for it. Letting agents are leeching of the system, an expensive middle man.

In the OP's case it's the landlord who is charging the tenant more than Open Rent are charging the landlord. Open Rent are only a letting agent in that they allow landlords to advertise on portals such as Rightmove and Zoopla. They don't actually charge tenants any fees or offer fully managed service to landlords.

Guest101

Chrysalis wrote: »

apple dont apply a 25x upwards multiple from costs to profit tho. - So it's the % of profit that bothers you?

Regardless I dont think its a good comparison, if I am renting a property it is not my choice to purchase a credit check, that is their business, and if they want to carry one out then they pay for it. - It is your choice. You want to rent property A, and to do so, you must have a credit check done. You can always go rent property B.

Credit card companies dont bill me for credit check's on an application. - They do, it's built into the cost of credit
Likewise mobile phone companies.

So would you prefer a LL increase rent by £5 per month to cover those costs?

Chrysalis

Guest101 wrote: »

So would you prefer a LL increase rent by £5 per month to cover those costs?

First off its not the LL costs is the middleman LA costs. Also the costs are not required, they dont have to carry out a credit check.

Funding a pointless credit check is a bit different e.g. to fixing a boiler.

But anyway.

Why would I think it reasonable to add £5 a month to my rent to pay for a £2 credit check?

You seem to think there is some divine right to this excess profit.

I have no doubt of course that when this becomes law rents will go up in retaliation to protect the revenue stream, that is probably still preferable as then the money is no longer needed all up front by the tenant, and also only payable if they get the property.

Also if a LA wants to charge say £100 to issue a tenancy agreement every 6 months, is it also reasonable for the tenant to charge £100 to sign that tenancy agreement?

Guest101

Chrysalis wrote: »

First off its not the LL costs is the middleman LA costs. - The LL has instructed an agent, the costs should be payable to the LL, under agency law. Also the costs are not required, they dont have to carry out a credit check. - They also don't have to rent to you

Funding a pointless credit check is a bit different e.g. to fixing a boiler. - Why is it pointless?

But anyway.

Why would I think it reasonable to add £5 a month to my rent to pay for a £2 credit check? - Because if you don't like it, don't rent that house?

You seem to think there is some divine right to this excess profit. - 'divine'? no. But ofcourse anyone can profit to any percentage they wish.

I have no doubt of course that when this becomes law rents will go up in retaliation to protect the revenue stream, that is probably still preferable as then the money is no longer needed all up front by the tenant, and also only payable if they get the property. - There is no evidence of sharp rent increases in Scotland, which is the basis for the law.

Also if a LA wants to charge say £100 to issue a tenancy agreement every 6 months, is it also reasonable for the tenant to charge £100 to sign that tenancy agreement?

No. Obviously not, as alternative could ofcourse be a s.21 notice.....

Chrysalis

Likewise I dont have to rent from them.

Your attitude is a bit of "I am better than you" attitude in that you own the property you can do what you want.

If the LL asks a Letting Agent do do a pointless credit check then thats a service to the LL not the tenant so the LL pays it not the tenant. As I said Loan and credit card companies dont charge every applicant to apply and also make it non refundable if they turned down, that is simply crazy and it is why it will soon be outlawed.

I expect most LL's dont specifically ask for credit checks, they may ask for ID and proof of working checks. But even so you trying to excuse a very bad practice which shows bad for your character.

Please tell me how you think a credit check works for someone not actually supplying credit? Also why you seem to be happy with this kind of practice going on, no wonder the country is in such a state as this is just pure greed from taking advantage of people.

You may not like it but the days are coming to an end, both labour and the tories will ban these fee's. No upfront fee's for renting will be allowed when the legislation comes in. How the LA's make their money after that I dont care, if they go out of business it would be a good thing.

I like your last line by the way Double standards, so the letting agency/landlords time is worth £100 but the tenants is not, brilliant. Printing out that tenancy agreement from a template is very hard work right.

So in short.

You support landlords taking advantage of vulnerable people, pay this fee, pay that fee or you evicted.

Chrysalis

Guest you may think I just hate all landlords, not really.

But try and think of it like this.

On one hand you may have a landlord who respects the position tenants are in, values their relationship with tenant, but needs to cover their costs and maybe a small profit on top, so they set the rent to achieve that, but they also make the effort to make things as affordable to the tenant as possible. This kind of landlord I got no issue with, and would also try to keep their costs down by not reporting non essential issues etc.

The other type of landlord which I have an issue with would be one who is simply out to maximise profit, nothing else, they dont care if it means they have void's a roller coaster of tenants, as long as the profit is maximised. No respect for the tenants as its all about #1 themselves, thats the type of landlord I dont like.

There is also the third type who just want to avoid as much work as possible, they want to make a profit but are neutral on fees, so they employ a letting agent, and this type of landlord can often be unaware how tenants get treated and what sort of fee's they paying. I once had a landlord who sacked the LA between us when he found out they wanted to charge me £60 to renew the tenancy and it risked him losing me as a tenant. My current landlord originally used to let through agencies and effectively sacked them as he also doesnt believe in fee's, he now runs his own agency, but his agency owns all the properties and charges no fees. So thankfully not all landlords have the same attitude as you do.

bowlhead99

Chrysalis wrote: »

Likewise I dont have to rent from them.

Your attitude is a bit of "I am better than you" attitude in that you own the property you can do what you want.

Well, if you own something you can do what you want with it, within the bounds of applicable law. But as you said, you don't have to rent from them you can do what you want too.

Which creates a market for landlords to make choices on how much they or their agents want to charge for set-up of a new relationship and the ongoing rent per month, and for tenants to make choices on how much they want to pay for set-up of a new relationship and the ongoing rent per month.

If the LL asks a Letting Agent do do a pointless credit check then thats a service to the LL not the tenant so the LL pays it not the tenant.

One could argue that it is a service to the tenant, because:

- the landlord - who is being asked to trust his property to someone who proposes to pay him £x per month but may stop paying - wants to know the tenant's level of debts, history of failing to pay bills and skipping out on loans etc.

- the tenant has no way of giving comprehensive independent evidence of that, without having a credit reference agency supply information direct to the landlord.

- if he pays for the service, the landlord gets the independent information, which is in the interest of the tenant, because without the information the landlord would be reluctant to let. So, arguably the tenant is buying a service for himself, to make his offer of 'being a tenant' something that the landlord would be willing to accept.

As I said Loan and credit card companies dont charge every applicant to apply and also make it non refundable if they turned down, that is simply crazy and it is why it will soon be outlawed.

They build it into the overall product price rather than having it billed up front. Ultimately, the credit check is still done and you still pay for it if the company makes any money off you.

The 'non refundable if turned down' is the bit that would be arguably unfair, but as others in this thread have said to the OP, if you pay to get credit checked and pass the check but the landlord then prefers to rent to someone else, you should get your fee back.

I expect most LL's dont specifically ask for credit checks, they may ask for ID and proof of working checks. But even so you trying to excuse a very bad practice which shows bad for your character.

I am not a landlord or a tenant and don't consider myself to be a bad character.

But asking for a credit check or a proof of working check or ID or whatever, none of that sounds like a 'very bad practice'. It seems quite normal if you are going to hand over a very valuable property to a person who you don't know, who will occupy it and be difficult to evict, that you would want to have someone prove their status to you. There is an overall negotiation of how much rent they will pay you and if you don't make as much money as you want, you will pull out of the deal; whether there is an up front fee and lower ongoing rent, or no up front fee and higher ongoing rent - well, you can decide how to structure it.

The bad practice is not "charging for an ID or credit check to take place", it is charging for it and then not offering the property even though the person passed the check. That is something practiced by relatively few landlords and people above in this thread have agreed that it is something that should not happen, i.e. you should be able to get the fee back if they don't let you rent after passing the check.

Please tell me how you think a credit check works for someone not actually supplying credit? Also why you seem to be happy with this kind of practice going on, no wonder the country is in such a state as this is just pure greed from taking advantage of people.

As mentioned, your credit file will show your level of secured and unsecured debt and available unused credit, together with other facts such as whether you have gone bankrupt instead of paying your bills or whether there are any financial commitments you have chosen not to meet within the last six years including defaulting or paying late for things.

That sort of stuff is quite relevant if you are considering whether you can rely on a financial commitment being made to you in exchange for exclusive use of an asset worth tens or hundreds of thousands of pounds.

You may not like it but the days are coming to an end, both labour and the tories will ban these fee's. No upfront fee's for renting will be allowed when the legislation comes in. How the LA's make their money after that I dont care, if they go out of business it would be a good thing.

On a practical level it would probably not be a good thing to you as a renter if owners of rental property went out of business on a large scale and reduced the pool of property available for renters to rent.

If someone does go out of business and stops renting out their property and has to transfer ownership of their property to someone else, that property will not be on the rental market for a while, so the other properties which stay on the market during that time may increase their prices due to supply and demand. The long term effect of it being less attractive to be a landlord due to lower profit margins, may not be overall positive for renters.

I like your last line by the way Double standards, so the letting agency/landlords time is worth £100 but the tenants is not, brilliant. Printing out that tenancy agreement from a template is very hard work right.

Try going to Tesco and arguing that you shouldn't have to pay the 30p for a can of baked beans because although they spent their time and effort arranging for someone to invent a recipe and grow and prepare and package the beans and bring them to the store, and employ people to operate the store and take your money, you have invested time and effort to go to the store so don't see why you should have to pay for their efforts it's all double standards.

Just tell them the customer is always right and so it should be free. You can stick to your guns but might find yourself having to do without the beans.

Chrysalis

Not a good comparison.

With tesco I am paying for a can of beans that they have had to purchase from a supplier or produce themselves. That clearly has more effort and cost than printing out a tenancy agreement. Not to mention its 30p not £100.

In addition people need places to live, its something they have to worry about, a can of beans is not the same thing in that respect. If you cannot see the difference between buying a can of beans and taking advantage of a tenant I dont know what to say.

A letting agency can argue they have had to pay someone a premium to verify the legality of tenancy contracts and so forth, but of course a tenant can have the same argument.

I agree banks will absorb credit check costs into their overall revenue, and I have no issue with that, it means the cost is actually only paid by their customers (not people applying) and they also are not absorbing £100 of costs per applicant, they absorbing just the "actual" cost. Many applications as an example for a credit card are decided automatically, those sort of checks have minimal cost, some are of course audited by humans and will have genuine higher costings but still are absorbed only by active customers.

Guest101

Chrysalis wrote: »

Likewise I dont have to rent from them. - Indeed.

Your attitude is a bit of "I am better than you" attitude in that you own the property you can do what you want.- FYI I rent, and if you regularly read this forum, or check posting history you will see I fully support lots of tenants, their rights, and give advice on how to handle difficult landlords.

If the LL asks a Letting Agent do do a pointless credit check then thats a service to the LL not the tenant - not true. The LL isn't asking the agent to do a credit check, agency law - the letting agent is the same as the landlord. The LL is asking the tenant to do a credit check, via the agent. so the LL pays it not the tenant. As I said Loan and credit card companies dont charge every applicant to apply and also make it non refundable if they turned down - it depends on why you were turned down. a well run credit check will only ensure that the tenant has been honest. The criteria should be clearly outlined. there is not a pass / fail. , that is simply crazy and it is why it will soon be outlawed. - credit checks wont be outlawed.

I expect most LL's dont specifically ask for credit checks - do you have a source, or is this just opinion? , they may ask for ID - must* - right to rent law. and proof of working checks. - *income, many people don't work but have a good income from investments, pensions etc. But even so you trying to excuse a very bad practice which shows bad for your character. - in what way?

Please tell me how you think a credit check works for someone not actually supplying credit? - rent is a debt. They are in essence supplying credit, just like a mobile phone. Also why you seem to be happy with this kind of practice going on, no wonder the country is in such a state as this is just pure greed from taking advantage of people. - Suggest you stop, I'm not taking advantage of anyone.

You may not like it but the days are coming to an end, both labour and the tories will ban these fee's. - why wouldn't I like it? No upfront fee's for renting will be allowed when the legislation comes in. - that's not yet confirmed. How the LA's make their money after that I dont care, if they go out of business it would be a good thing. - it wouldn't

I like your last line by the way Double standards, so the letting agency/landlords time is worth £100 - no it's not but the tenants is not, brilliant. Printing out that tenancy agreement from a template is very hard work right.

So in short.

You support landlords taking advantage of vulnerable people, pay this fee, pay that fee or you evicted.

No, I'm simply stating how the law on tenancy works.

Guest101

Chrysalis wrote: »

Guest you may think I just hate all landlords, not really.

But try and think of it like this.

On one hand you may have a landlord who respects the position tenants are in, values their relationship with tenant, but needs to cover their costs and maybe a small profit on top, so they set the rent to achieve that, but they also make the effort to make things as affordable to the tenant as possible. This kind of landlord I got no issue with, and would also try to keep their costs down by not reporting non essential issues etc. - So those they get worse and cost more to repair?

The other type of landlord which I have an issue with would be one who is simply out to maximise profit, nothing else, they dont care if it means they have void's a roller coaster of tenants, as long as the profit is maximised. No respect for the tenants as its all about #1 themselves, thats the type of landlord I dont like. - Ok, you don't have to like them.

There is also the third type who just want to avoid as much work as possible, they want to make a profit but are neutral on fees, so they employ a letting agent, and this type of landlord can often be unaware how tenants get treated and what sort of fee's they paying. I once had a landlord who sacked the LA between us when he found out they wanted to charge me £60 to renew the tenancy and it risked him losing me as a tenant. My current landlord originally used to let through agencies and effectively sacked them as he also doesnt believe in fee's, he now runs his own agency, but his agency owns all the properties and charges no fees. So thankfully not all landlords have the same attitude as you do.

I'm not a landlord....