Credit checks on tenants

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    #16
    Originally posted by Poppy View Post
    Why didn't you start a fresh thread lorenzo?
    I'll answer you as soon as you answer my question on the other thread.
    Now signature free.

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      #17
      Originally posted by attilathelandlord View Post
      I'm considering starting to take DNA samples!
      If they're on cannabis, DNR might be more appropriate.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

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        #18
        Originally posted by Mrs Jones View Post
        I am definitely with Attilathelandlord on this. Landlord financial risk is massively higher than any tenant's risk. No tenant gets into any of my properties without having passed a very through checking procedure - and parting with 2.5 month's rent (1.5 month deposit and 1 month rent in advance) - all rental payments by standing order (to my agent).

        I would prefer to turn down suspect tenants and have a void month than all the hassle which can come from dodgy tenants!
        I agree, I'm an LL too, but this 2.5 months rents good conceivable disappear into the ether if LL is insolvent and non-conforming to legislation, add in moving, hotel costs, the possibilty of increased water and/or power bills if LL is maintenance shy and it can quickly mount up. Not to mention the stress and misery T must endure under these circumstances.

        I'm not being silly, but some of you people seem to regard all tenants as scum. Some are, but in my experience, most are pretty good. I've personally never had a problem with tenants (lucky I 'spose), but I've had problems with a dodgy landlord, that was quite costly over a period of time.

        Surely, tenant is at least entitled to know details as per outlined by Jeffrey.
        Now signature free.

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          #19
          Yes, ny AST's state that the property is mortgaged etc.

          I expect tenants to ask for proof of ownership but they rarely do. In any case, I could be showing any old document knocked up on my computer. I've actually asked tenants if they really know whether I'm the owner and am met with blank stares of amazement, like, would someone really do us over?!!! I'm sad that people (not just tenants) are so gullible, I think financial nous should be taught as school.

          Of course tenants are not scum. but don't forget that this is a business and as you know, getting rid of a bad tenant is much harder on the landlord.

          Much harder for a landlord to disappear with cash as any tenant on the ball will check on landregistry for ownership of property and promptly put a charge over said property (following legal process) if the landlord doesn't play ball.

          Comment


            #20
            Lorenzo's point provokes the notion that LL's could create an accreditation brand that assures tenants that the LL's finances are sound, and then they can put up the rent because of that extra bit of professionalism and peace-of-mind they are able to give their appreciative tenants.
            All posts in good faith, but do not rely on them

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              #21
              Originally posted by attilathelandlord View Post
              I expect tenants to ask for proof of ownership but they rarely do. In any case, I could be showing any old document knocked up on my computer. I've actually asked tenants if they really know whether I'm the owner and am met with blank stares of amazement, like, would someone really do us over?!!!
              I don't have any statistics, but I suspect that the actual number of tenants who get screwed by somebody letting a property when fraudulently claiming to be the owner must be miniscule in real terms; the number who lose out due to a landlord failing to pay their mortgage will be higher, but again tiny in comparison to the number of landlords who have experienced rent arrears. If it was perceived as a big problem I have no doubt that as part of their ongoing campaign to increase landlords' paperwork etc, Nu-labour would have made it compulsory for a landlord to provide a tenant with official documentation from the Land Registry pertaining to ownership and mortgages - wouldn't be that hard to set up.

              Comment


                #22
                Originally posted by hobo View Post
                I printed out the TenantVerify form but the tenant is concerned that the level of detail is too great and that giving someone all that information may possibly expose them to identity fraud. Must admit it does seem very onerous given i can get a credit check done from an estate agent based soley on previous address and basic details.
                There is information on my own tenancy application form which doesn't have anything to do with the suitability of the tenant; it's stuff I want to know which will help me track them down in the event they do a bunk while owing me money. In theory I could ask for the info after the tenant has been accepted, but that would be quite awkward - much better to ask for the whole lot together.

                You should have sight of original documents - ie, I insist on seeing an up-to-date bank statement, NI details, driving licence etc; not just numbers written on a form by the tenant.

                The info is for your Mum's use only; if the potential tenant doesn't trust her not to pull an ID fraud, then she could point out that the tenant is to be trusted with a house worth a 5-figure sum - trust works both ways!

                (I recently had an applicant who was paranoid about providing me with his bank account sort-code and number, but I pointed out that the very same information was printed on the cheque he was about to give me...)

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                  #23
                  Just to give a tenants perspective, I can see why perfectly reasonable tenants might be a bit unsure about this. If anything you could take it that this is a person who has good reason to protect their finances may be a better bet for the rent and might be better at taking care of your property too.

                  In this case the potential tenant is handing a lot of their personal details to a person they have never met before. You can say that this is only to enable checks to be done but the point is that at this time the potential tenant doesn't know that this is the only use that would be made of it. I suspect no one even hands over their details to have their identity stolen so you can assume most people's details get taken for reasons unrelated to the original purpose. Its a bit like being funny about handing over your credit card in the restaurant to be taken out of sight for people to do the payment - although this use is perfectly reasonable we get warned not to do it as so often the situation is abused.

                  Being a generally cautious person who takes care with their personal information I must admit I'd be a bit concerned and at handing over such information expecially when its to another person and not an agency. For one thing you don't have the same assurances that they will hold this information securely even if they don't make any misuse of it.

                  It would be far simpler and protected on both sides to have some independent place where the tenant can submit their details to verify their identity and then this organisation provides appropriate a report to the LL or perhaps holds it until the case of a dispute - perhaps via TDS?

                  So just to provide perspective that not all people who are reluctant to do this are going to be a hidden problem.

                  Comment


                    #24
                    Originally posted by Subway View Post
                    In this case the potential tenant is handing a lot of their personal details to a person they have never met before.
                    So, no problem for the landlord who is handing over his most valuable possession (a quarter-million pound house) to a person he has never met before?

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                      #25
                      Interesting idea Subway but who's got the time to do all that. Landlord hands over possession of £250k tenant hands over details of who they are. Sounds fair enough to me.

                      Comment


                        #26
                        Eric I can see your point and I do feel very sorry for all LL who have such awful problems on the forum here and I too think the law is not fair to let people trash a place and get away with unpaid rent.

                        However what we are talking about is the minority on both sides who are utter sh!ts and there are plenty of LLs and agents who take the p!ss out of tenants too - those extra little charges and deductions. I would venture that the proportion of tenants who have legitimate problems (or did before DPS) is higher than proportion of landlords. I agree though when it ges wrong it is usually much more expensive for the LL than tenant. (ducks for anticipated abuse!)

                        From the tenant perspective at the point these details are asked for they have not had anything handed over to them. The process requires the tenant to trust the LL before the other way around. The papers are very quick to warn us about the perils of identity theft and the losses and misery caused by that too so I think tenants are risking a resonable amount too. From my perspective I am handing over all my details to someone who may not even have the house - as you point out Attila most tenants don't know this and aren't usually given this assurance.

                        I'm not saying that checks shouldn't be done thoroughly and aren't reasonable and very very necessary, but tenants need to have some assurance that their identity is protected. I don't know what is on the tenant verify report - perhaps if I did I wouldn't be so concerned. What I feel nervous about is the carte blanche type of access I'd feel I was giving someone to my personal details having provided this type of gateway stuff.

                        In the OP example the person was not handing information over to an agency but just another individual they do not know. I'm not saying that the tenant shouldn't have to do this but just saying if you don't at least feel you should reassure a person with these concerns and just take it as a red flag it seems a little unfair. At least give the tenant assurance what you will do with this information, the level of further detail you are going to request with this information and assurances over how it will be stored and destroyed. Just recognise that these concerns are legitimate even if they need to be resolved to move forward.

                        My main bugbear which isn't on the tenant verify form is when people want copies of bank statements. One bank I'm with asks identity check questions which could mostly be answered by someone with access to my bank statement - overdraft limit, direct debits, regular payments etc - plus a few other details which are on most forms.

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                          #27
                          Originally posted by Subway View Post
                          My main bugbear which isn't on the tenant verify form is when people want copies of bank statements. One bank I'm with asks identity check questions which could mostly be answered by someone with access to my bank statement - overdraft limit, direct debits, regular payments etc - plus a few other details which are on most forms.
                          OK, well let's address that issue, as I'm one landlord who specifically asks to see an original bank statement. I think it's very important as it confirms to me that the I definitely have the correct details on file; it lets me see the salary credits going in; who pays them and how much they are, and what date they go in. All that is valuable information when you need to extract unpaid rent later (eg I currently have a recent court judgement for unpaid rent of nearly £2K against an ex-tenant, and the bank info I have on the original application form is incredibly useful to me in terms of knowing whether to apply for an Attachment of Earnings Order, or to have the bank account frozen (knowing exactly when the salary credit hits!).

                          If you have see last three bank statements you can also see the balance over that period; if you can see that despite having an OK credit history the applicant's current account is permanently £5K in the red, that's obviously a big warning sign.

                          Personally, if I have an applicant who's iffy about showing bank statements, I will explain what info I need, then in front of them I'll run over the statement with my finger, clearly picking off the info I need, and ticking the boxes on my application form, then hand it back. I would never take them away or make copies, which hopefully would help alleviate concerns about me using the info fraudulently.

                          I had a really promising applicant a couple of years back, but who needed a guarantor (parents) and I asked to see their bank statements as part of the vetting process. They were very worried about this, especially as it would mean posting them to me. I wasn't prepared to compromise my procedure, and because they really wanted their offspring to get the property, the parents drove about 200 miles round-trip just to show me the statements. Have to admit I did feel a bit bad about it...! But without the bank statements, I wouldn't have signed up the applicant know matter how how much I liked her (she's still a tenant; and probably my best one ever in fact, confirming my original feelings).

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                            #28
                            It's give and take really, the majority of lettings go well.

                            I always keep tenant's details in a locked filing filing cabinet (in a basement, hidden by a "Beware of the Leopard" sign!).

                            But I am very insistent on documentation, when through my own stupidity I didn't check the tenant's details and ended up £8000 the poorer.

                            If people don't want to fill in my forms, then quite honestly, then the exit's that way.

                            Which doesn't mean I don't understand the reticence. I just "won't get fooled again".

                            Comment


                              #29
                              Originally posted by Ericthelobster View Post
                              If you have see last three bank statements you can also see the balance over that period; if you can see that despite having an OK credit history the applicant's current account is permanently £5K in the red, that's obviously a big warning sign.

                              Personally, if I have an applicant who's iffy about showing bank statements, I will explain what info I need, then in front of them I'll run over the statement with my finger, clearly picking off the info I need, and ticking the boxes on my application form, then hand it back. I would never take them away or make copies, which hopefully would help alleviate concerns about me using the info fraudulently.
                              Its good you don't take copies as I know some places do and that would worry me. But if as below you require people to send you the information then they have no assurance that you aren't taking a copy - I expect thats what everyone says!

                              Out of interest, what information do you need? Salary amount, date paid? My average balance on my current account is very low as the most is shifted off to higher rate savings accounts as soon as it hits so would that worry you?

                              I would not feel so concerned sending you a copy with the information you don't need blacked out but I guess you wouldn't want that? Also I don't really have paper statements so anything I print out from on-line banking would be very open to manipulation...

                              Don't you rely on bank references where they make a statement as to their opinion as to how good someone is for the rent?

                              Originally posted by Ericthelobster View Post
                              I had a really promising applicant a couple of years back, but who needed a guarantor (parents) and I asked to see their bank statements as part of the vetting process. They were very worried about this, especially as it would mean posting them to me. I wasn't prepared to compromise my procedure, and because they really wanted their offspring to get the property, the parents drove about 200 miles round-trip just to show me the statements. Have to admit I did feel a bit bad about it...! But without the bank statements, I wouldn't have signed up the applicant know matter how how much I liked her (she's still a tenant; and probably my best one ever in fact, confirming my original feelings).
                              Doesn't this confirm that not all people who take care with their personal information are potential problems and maybe that those who take most care with their own affairs will take most care of yours too.

                              Comment


                                #30
                                Originally posted by Subway View Post
                                Out of interest, what information do you need? Salary amount, date paid? My average balance on my current account is very low as the most is shifted off to higher rate savings accounts as soon as it hits so would that worry you?
                                Info from statements as per my last post. No of course I certainly wouldn't expect applicants to have a high current account balance (especially if the debits to a high-interest account are obvious!); it's a whopping ongoing overdraft which would ring the warning bell.

                                I would not feel so concerned sending you a copy with the information you don't need blacked out but I guess you wouldn't want that? Also I don't really have paper statements so anything I print out from on-line banking would be very open to manipulation...
                                Well, so far I've never had a tenant without normal paper statements so I guess I haven't given that one too much thought yet. Most people don't want to trash their original paper statements and wouldn't suggest it; as you say a print-out is really no more an 'original' statement than a photocopy.

                                Don't you rely on bank references where they make a statement as to their opinion as to how good someone is for the rent?
                                I've never taken them. I could be wrong; but from what I've heard they don't tell you much anyway, and eyeballing statements is probably more revealing. Banks also charge; and since I choose not to charge applicants for referencing unless they pull out, I suppose that's another consideration.

                                Doesn't this confirm that not all people who take care with their personal information are potential problems and maybe that those who take most care with their own affairs will take most care of yours too.
                                Possibly, I wouldn't argue with you; but that doesn't mean that if someone objects to me seeing their bank statements I'm just going to assume they are 'OK' and let them off that requirement!

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