Flakey prospective tenants - how to manage loosing money on credit checks

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    Flakey prospective tenants - how to manage loosing money on credit checks

    Hi All

    Since the change in not being allowed to charge the tenant to for credit and reference checks etc, I am wondering how to manage the potential loss on prospective tenants being quite happy for you to foot the bill and spend admin time on the checks only to find they pull out on a whim or who are found not to having a chance in passing as a suitable tenant/s.

    Anyone else having these concerns?

    I am experiencing interest from quite a few flakey tenants, who are all keen to begin with and then for some reason suddenly become unresponsive and not as committed to the rental process. My concern is that I could start the prospective tenant check process and incur the fees only to find that they may not wish to proceed with taking the property etc

    I do not want to take holding deposits anymore to test their commitment, as you are legally obligated to take the tenant if you cannot find a very good reason not to take them, (ie you cant trust your gut anymore and turn them down, for example if you feel something is a miss or you decide you feel uncomfortable with them taking the property)

    Your thoughts would be appreciated on how to minimise the loss on conducting credit checks on not fully committed applicants

    Thanks

    Sparling seas



    #2
    Originally posted by Sparklingsea View Post
    I am experiencing interest from quite a few flakey tenants, who are all keen to begin with and then for some reason suddenly become unresponsive and not as committed to the rental process. My concern is that I could start the prospective tenant check process and incur the fees only to find that they may not wish to proceed with taking the property etc

    I do not want to take holding deposits anymore to test their commitment, as you are legally obligated to take the tenant if you cannot find a very good reason not to take them, (ie you cant trust your gut anymore and turn them down, for example if you feel something is a miss or you decide you feel uncomfortable with them taking the property)
    That's not what the law say.

    You are obliged to repay the holding deposit (subject to exceptions) if you decide not to grant a tenancy, and the holding deposit is limited to one weeks' rent.

    As to the exceptions, includes:
    9. Paragraph 3(b) or (c) does not apply if the tenant provides false or misleading information to the landlord or letting agent and—

    ....(a) the landlord is reasonably entitled to take into account the difference between the information provided by the tenant and the correct information in deciding whether to grant a tenancy to the tenant, or

    ....(b) the landlord is reasonably entitled to take the tenant's action in providing false or misleading information into account in deciding whether to grant such a tenancy.

    10. Subject to paragraph 13, paragraph 3(c) does not apply if the tenant notifies the landlord or letting agent before the deadline for agreement that the tenant has decided not to enter into a tenancy agreement.

    11. Subject to paragraph 13, paragraph 3(c) does not apply where the deposit is paid to the landlord if—

    ....(a) the landlord takes all reasonable steps to enter into a tenancy agreement before the deadline for agreement, and

    ....(b) if the landlord has instructed a letting agent in relation to the proposed tenancy, the agent takes all reasonable steps to assist the landlord to enter into a tenancy agreement before that date, but

    ....(c) the tenant fails to take all reasonable steps to enter into a tenancy agreement before that date.

    12. [Basically 11 but paid to the LA]
    If the exceptions applies, you just have to tell the applicant in writing within 7 days the reason you are retaining the holding deposit.
    I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

    I do not answer questions through private messages which should be posted publicly on the forum.

    Comment


      #3
      I send an automated message asking them to tell me a bit about themselves.
      If I don't get the right answers I don't proceed any further.

      Comment


        #4
        Ask them to provide you with all the information you need for credit and other checks, and to satisfy yourself that they seem reasonable.

        If you do not like the responses, then do not proceed.
        You then have the options of
        1. reference several at your cost and choose the one you want (but they might pull out)
        2. take a holding deposit and fully reference them.
          1. If referencing shows they did not disclose something that makes them undesirable, then keep he holding deposit, write to them explaining why, and move on to the next.
          2. If referencing is OK but you do not feel comfortable with them, then decline them, refund holding deposit and move on.
          3. If you are happy to proceed, then do so.

        Comment


          #5
          You need to do what the legislators were intending you to do and ignore all but the most safe tenants -- which is after all the effect of most nanny state legislation. What the legislators failed to realise is that holding deposits, properly used (as opposed to their use as a scamming mechanism by some agents) serves the precise purpose of making vulnerable and insecure tenants less vulnerable.

          For example I routinely accept tenants from China with holding deposits contingent on them getting visas. This means that they know they will have accommodation and that I won't let to someone else while I wait. Now they have to arrive and stay in a hotel.

          Anyway you really don't need credit checking agents except as the final icing -- it costs nothing to collect references and to examine original bank statements.

          Comment

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