Legislative details on tenant referencing
In the UK, there are several legislative details that landlords must be aware of when conducting tenant referencing
Following the Tenant Fees Act, landlords in England can no longer charge tenants for reference checks – the costs must be absorbed by the landlord or letting agency, even if the applicant fails the reference check.
Similar changes were applied in Wales and charging fees has been banned in Scotland since 2012. Landlords in Northern Ireland can only charge for the actual cost of the check.
Tenant referencing also has implications on whether you can legally retain a holding deposit if a tenancy application falls through. Also, under the Tenant Fees Act, a holding deposit must be returned to the tenant if the landlord or letting agent withdraws from the application process.
However, if the tenant provides the relevant information but fails the referencing process, the letting agent or landlord is considered responsible, and would have to return the holding deposit.
Some tenant referencing companies, such as TenantVERIFY, offer an expedited service and can turn the reference around in a few hours.
But generally it can take up to a couple of days to gather all the information.
Of course, whether you’re carrying out the reference check yourself or using a professional tenant reference provider, unavoidable problems such as a previous landlord or employer taking their time to respond to a reference request, can cause delays to the process.
Landlords should screen tenants by collating information about them and pre-qualifying them by phone. You have every right to find the right tenant, which will generally mean rejecting some applicants, and screening is your first line of defence in avoiding bad tenants.
However, you do need to be wary of discrimination which is against the law. You can’t refuse to rent to a tenant for any of the following reasons, as they are ‘protected characteristics’ as part of The Equality Act:
being disabled
pregnant
married
transexual or on account of their sexuality
gender
religion
race
nationality
In addition, you can’t discriminate in advertising against a Universal Credit or housing benefit tenant.
You can choose not to rent to someone if you believe they won’t look after your property, if they fail the reference checks, if they smoke or even if your gut feel tells you not to. Ultimately, it’s up to you who you rent your property to, but you must not reject someone on the basis of one of the ‘protected characteristics’.
