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

Guest101

bowlhead99 wrote: »

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.

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.

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 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.

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.

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.

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.

Just FYI, letting agents and their reference companies wont see defaults, late payments or other information - only the public record.


But otherwise I agree with you

Chrysalis

rent is only a debt if paid in arrears, I dont know any landlord who accepts payments in arrears, its paid in advance at start of month.

Chrysalis

bowlhead consider 2 different people.

Person A - cannot afford to pay credit card payment, and rent. Chooses to default on the cc payment and pay the rent. Dodgy credit file but no missed rent payments.
Person B - same position but defaults on the rent instead and maintains clean credit file.

I would say person A is the more desirable tenant but the credit file wont report that, I have never seen rent histories reported on credit files either which only backs up my point, that it is not credit.

What is better is an actual affordability check, which typically means proof of income and outgoings, so a bank statement and maybe wage slip. Maybe even a letter from previous landlord aka a reference as well as rent statement from previous/current landlord. That is a far more suitable way to determine reliability for paying rent.

Of course the latter involves more work for the agency as they would need to request all these things from the applicant, whilst a credit check is quicker and cheaper (and ultimately more profitable for the agency). I expect agencies actually make most of their money from failed applicants, considering applications fees, credit check fees, and they may get dozens of applicants for each property. Also interesting is that many LA's say they do employment checks, some actually do but some pretend they do and dont, I have in the past provided details to contact my employer to LA's only to find out they never bothered to contact my employer or ask me for a wage slip. I actually think LA are bad for LL's and tenants as without them there is no money lost to a middleman.

For reference I do actually personally know more than 10 landlords, obviously a very small number in the grand scheme of things but it does give me some insight to the other side so to speak.

Guest101

Chrysalis wrote: »

rent is only a debt if paid in arrears, I dont know any landlord who accepts payments in arrears, its paid in advance at start of month.

It is a payment due on a specific date, once you get to that date you owe the money. No a pro rata per day, but the full payment. The money is owed (ie in debt) on the day it is due, regardless of if it is in arrears or advance

Guest101

Chrysalis wrote: »

bowlhead consider 2 different people.

Person A - cannot afford to pay credit card payment, and rent. Chooses to default on the cc payment and pay the rent. Dodgy credit file but no missed rent payments.
Person B - same position but defaults on the rent instead and maintains clean credit file.

I would say person A is the more desirable tenant but the credit file wont report that, I have never seen rent histories reported on credit files either which only backs up my point, that it is not credit.

What is better is an actual affordability check, which typically means proof of income and outgoings, so a bank statement and maybe wage slip. Maybe even a letter from previous landlord aka a reference as well as rent statement from previous/current landlord. That is a far more suitable way to determine reliability for paying rent.

Of course the latter involves more work for the agency as they would need to request all these things from the applicant, whilst a credit check is quicker and cheaper (and ultimately more profitable for the agency). I expect agencies actually make most of their money from failed applicants, considering applications fees, credit check fees, and they may get dozens of applicants for each property. Also interesting is that many LA's say they do employment checks, some actually do but some pretend they do and dont, I have in the past provided details to contact my employer to LA's only to find out they never bothered to contact my employer or ask me for a wage slip. I actually think LA are bad for LL's and tenants as without them there is no money lost to a middleman.

For reference I do actually personally know more than 10 landlords, obviously a very small number in the grand scheme of things but it does give me some insight to the other side so to speak.

LAs and LLs only see public records.... So both person A and B would be in the same boat. Person A would get a better reference though....