The tenant screening process

Having the right tenants living in your rental property makes all the difference, and hopefully leads to less worrying, less problem-solving and fewer headaches. To land yourself good tenants, a robust tenant screening process is vital. Adequate tenant screening can include doing credit checks (with the written permission of prospective tenants),  retrieving references from previous landlords, meeting them face-to-face finding out more about them, and looking into many more factors.

Conducting the tenant screening process correctly could be the difference between the perfect tenancy, and the tenancy from hell. Whether it’s you or an agency carrying out tenant screening, here are some things that we at CIA Landlords recommend you are aware of before signing away your property to new tenants.

Is there a tenant history of rent arrears?

Having tenants in persistent rent arrears is every landlord’s worst nightmare, hence in the England Private Landlord Survey 2021 84% of landlords said they were unwilling to rent to tenants with a history of rent arrears.

When a tenant owes you at least 2 months’ rent, you are able to serve them with a 4-week eviction notice. So, it is sensible to try and gauge whether or not a tenant has a history of rent arrears or late payments before renting to them since they could do the same with you.

Will they be paying rent through housing support or universal credit?

There is nothing wrong with renting your private property to tenants in receipt of social security payments or benefits. However, this is something you may want to be made aware of prior to renting to tenants because sometimes benefit payments can get delayed, and this will have a knock on effect of your tenant not being able to pay you rent on time.

Landlords being reluctant or unwilling to rent to tenants on benefits has been commonplace for years. However, landlords should be careful since discrimination towards tenants on benefits is now unlawful following a 2020 judgment against an agency that had put ‘no DSS tenants’.  Just because tenants are on benefits does not mean they won’t make excellent tenants who will look after your property. Despite recent changes in law trying to change attitudes towards tenants covering rent with social security payments, in the government’s England Private Landlord Survey 2021, 44% of landlords said they were unwilling to let to tenants on housing support or Universal credit.

Will have to make adaptations to your property?

One of your duties as a landlord is to provide reasonable adjustments for tenants, and this is particularly important if you are renting to disabled tenants. In accordance with the 2010 Equality Act, disabled tenants have the right to portable support aids or temporary adaptations when renting, this includes

•  Ramps.
• Written documents (tenancy agreement included) and signs in Braille.
• Accessible taps
• Accessible door handles
• Raised toilet seats

However, you are not obliged by law to make large adaptations for tenants and structural changes to your property that might be involved in something like installing a new wet room.

Credit checks

You’re renting your property to a prospective tenant after they have agreed to a credit check, but they fail it. What now? It’s up to you – you can reject the application or proceed with the tenant regardless. After all, there are feasible reasons why a perfectly suitable tenant may have a low credit score. For instance, they may not have lived at their current address for long enough to get their name on the electoral register, they may currently live at home and not be responsible for paying any of the bills, or perhaps they are not the tenant actually named on the tenancy agreement where they currently live. It’s worth bringing up bad credit with the tenant as there may be mistakes that even they are not aware of.

Difficult financial times can happen to anyone – it does not necessarily mean they will not make a good tenant. Saying that it will obviously ring alarm bells when you take on a tenant with bad credit. If they have a large amount of debt,  a large chunk of their income each month will go towards paying that off and they may have difficulty paying their rent. You are within your rights to reject a tenant due to a bad credit score.

Criminal records

Although a landlord cannot access a tenant’s criminal record themselves, they are free to ask questions about any criminal history. In saying that, you cannot refuse the tenant simply because they have a criminal record, as this is discrimination. You may feel instantly put off, but there are a few things to consider. Was the individual convicted of the crime? There’s a big difference between being arrested and being convicted. What was the offence and how recent was it? Perhaps it happened 20 or more years ago, in which case the tenant is likely to be low risk. Similarly, if the tenant has just one conviction and the nature of the crime isn’t necessarily violent, you’ve probably got nothing to worry about.

You can ask that a prospective tenant apply for a basic disclosure certificate from the Disclosure and Barring Service (DBS) which costs £18 to obtain in England and Wales to identify any unspent criminal convictions that they have. It’s completely your choice whether you open up your property to a tenant such as this, but remember how important it is to be fair and reasonable.

Poor references from previous landlords

Obtaining references is another way to mitigate the risk of winding up with a bad tenant. It’s proof, if you like, that this person is trustworthy and has given you all the correct information. It’s advisable to ask for references from an employer and also a financial reference to ensure that the tenant can pay the rent. The best reference to get is from a previous landlord and typically, you should insist on references from all landlords from the previous 3-5 years. A landlord reference is useful because you can find out if a tenant is trustworthy if they paid the rent on time and if they looked after the property.

Don’t be alarmed if no landlord references are available. Your prospective tenant may have never rented before as maybe they are only just leaving home. Only let yourself become suspicious if they refuse to give a landlord reference, or if the landlord refuses to provide one. This is likely to be a bad sign and indicates that you should not take the risk.

Tenant discrimination

When screening and/or interviewing prospective tenants, you have to be careful what kind of questions you are asking. If you come across as discriminatory in any way, you could be facing legal action. It is illegal to discriminate against tenants on the basis of race, gender, disability, sexuality, age, marital status or religion. Whilst you can check if a prospective tenant is a UK citizen, you cannot ask with country they were born in as this can be interpreted as an invasive question.

Similarly, you can ask how many occupants the tenants plan on housing but you cannot ask how many children an applicant has, as this could be discriminatory against familial status. That being said, you are free to refuse rent to anyone, but you must have decent grounds behind this. You can also ‘positively discriminate’, which is when you give someone preferential treatment for whatever reason. This can include offering a property specifically adapted for wheelchair users or the elderly, to a tenant with these characteristics over a young couple for example.

Rejecting a tenant

You want to protect your investment and trust your tenants, so it’s ok to go with your gut if you don’t feel quite right about someone. However, rejecting a tenant can be really tricky unless you have reasonable grounds to do so.

Your reasons could be any number of things – their salary, their pets, too many occupants or perhaps they’re a smoker. Maybe they’ve moved house five times in the past year and you’re concerned about their stability. We recommend that you be fair and honest, even if you are not necessarily required to be. You could make up any old excuse not to accept somebody, but you’ll potentially make the situation worse.

Whenever you reject a prospective tenant, you’ll always run the risk of accusations and being unfair. The only way to avoid this is to only reject tenants for valid reasons. You definitely need to come clean if you are rejecting someone based on their credit score, or any other information found in tenant screening reports, as it’s their right to know.

We hope you now feel more prepared to approach the tenant screening process. Do you feel prepared for events such as fire, theft or loss of rent? If your answer is no, you may want to consider landlord insurance. With CIA Landlords, you can compare landlord insurance to find the best quote for your needs. Just give us a call on 01788 818 670 or get a quote now.