Tenant Failed Credit Check - Will go with Guarantor

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    Tenant Failed Credit Check - Will go with Guarantor

    House went online friday, friday afternoon had phone call from letting agent.

    Person wants to view saturday 8-40am. Spend the whole of friday night cleaning property up for viewing, with 2 more bedrooms needed papering/painting.

    Person arrives at property, im there inside. Letting Agent is late. I show them around. They very happy with price, and quality. (I thought it was too cheap by the comments).

    They went into town, placed admin fee.

    Credit checks carried out, Tenant fails checks with a CCJ. Tenant is working tenant.

    We said we were not too fussy as we were not going to go with Rent Insurance scheme. LA said they can accept her if im happy and she get guarantor.


    Can anyone see a downfall with this.?


    We planned to have a £450 deposit, with a £90 a week rent, based on renting it out at the same price of a 2 bedroom house. 12 months of something, is better than 12 months of nothing..

    Im not scared of a tenant with CCJ or two, everyone has a blemish in the past.

    My mum has about 10, my wife has 1 from many years. Im clean.

    Regards,

    Chicco.

    #2
    Well, not knowing the full details it's difficult to say.

    However - if he told agents about CCJ I'd say okay with guarantor

    If he tried to keep it quiet and it turned up on credit check - I'd say no way.

    Comment


      #3
      Coo - that was quick. I am sure that they were happy with the quality - they will be having difficulty getting a property to rent with a CCJ against them which, I note they did not declare before it was revealed on the agent's credit check. It is so easy to accept willing tenants with the thought that my rent money is going to come in quickly without any void. They may be happy with the rent, but will they pay it? I would run a mile because you may think you are going to save a hundred or so by getting a tenant quickly, but in fact you run a significant risk of loosing thousands with the cost of getting such a tenant out when they fail to pay their rent and damage the property during the looong time it takes the law to act to get them evicted. Then there's the repairs, the re-advertising and all that money you may well have lost paying the mortgage! Steer clear and find a better tenant.

      P.P.
      Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

      Comment


        #4
        Was a really really fast application.

        Though, on a positive note we had a couple who were visiting there parents house pop in for a nose. The sign only went up today.

        They seemed very very very happy.

        Tenant told LA that they might have a low credit score, when they paid the £100 admin fee, and that they have a Guarantor, I think its her parents. Tenant is at a guess 35-40yrs old.

        I'll enquire more about the tenant tomorrow, and find out when the CCJ was and for how much. Ill ask about where they lived, and maybe get a contact number for a previous landlord.

        I guess my heart tells me that you are right, they might be looking for a next house to dump all there property and fail to meet payments, awaiting for the next eviction.

        Proposed Tenant came to view with parents, and was lead to be living with parents. Asked why i was renting through LA when i they could pay me direct. Felt they knew more than me..

        The property is in the middle of a council estate, so we marketed & advertised the house as LHA accepted, and reduced the Weekly rent by £10 to bring it too a very good bargain.

        Might be looking too deep into this though.

        Comment


          #5
          Why on earth should you use a LA when you can rent direct??? It is because a good, well established letting agent knows more about vetting tenants than you (or me) and I am happy to pay them a fee to advertise my property, conduct viewings and assess a potential tenant, reporting back to me as appropriate. As soon as a tenancy is agreed, said agent withdraws and I take over. It has worked well for me for years and that fee I pay the agent reduces considerably the chance of getting a poor tenant. The not-so-good ones are reluctant to use a High Street agent - they have to pay them a fee as well, after all, and they know that they are less likely to get approved than if they can con an inexperienced landlord directly.

          P.P.
          Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

          Comment


            #6
            Through choice really,

            Anyhow, on the original post.


            Is this Guarantor scheme any good, and will the LA mess things up with it.?

            A little searching has brought back some ideas, but none directly to my problem.

            Does actually have a Guarantor actually ensure my rental income incase Tenants fails to pay.

            Regards,

            Chicco\

            Comment


              #7
              Originally posted by Chicco View Post
              Is this Guarantor scheme any good, and will the LA mess things up with it.?
              What should happen is LA will reference / credit check guarantor also. Then Guarantor will sign a "Deed of Guarantee" which basically says the guarantor will pay rent / damages etc if tenant doesn't. If they don't, then you can take them to court in the same way as you could take a tenent to court.

              Does actually have a Guarantor actually ensure my rental income incase Tenants fails to pay.
              Nothing is guaranteed. If your agent has checked out the guarantor then you should be able to enforce a court order against them.

              Comment


                #8
                Originally posted by Snorkerz View Post
                What should happen is LA will reference / credit check guarantor also. Then Guarantor will sign a "Deed of Guarantee" which basically says the guarantor will pay rent / damages etc if tenant doesn't. If they don't, then you can take them to court in the same way as you could take a tenent to court.


                Nothing is guaranteed. If your agent has checked out the guarantor then you should be able to enforce a court order against them.
                Sounds interesting,

                What are the costs with creating one of these 'deeds'.

                Proposed tenant is £100 down so far, and with the 2nd person enquiring about the house semi-leads me to move onto the next applicant. Though dont want to move from 1, if 2 decides that they are not interested.

                I assume to recover the costs from the Guarantor, it would be a case of small claims court, filed by myself.

                I have some moneyclaimonline history..

                Comment


                  #9
                  Interesting question.

                  I have discovered this evening that only solicitors and certain lawyers can write a deed for money (ie LA can not ofer this service!).

                  However, there are templates online - http://www.letmerlin.co.uk/_forms/11...-Unlimited.pdf is one.

                  To be on safe side, Guarantor must be able to read tenancy agreement before signing guarantee.

                  It must be witnessed by an independant person over 18 - eg not a relative.

                  Comment


                    #10
                    Originally posted by P.Pilcher View Post
                    Why on earth should you use a LA when you can rent direct??? It is because a good, well established letting agent knows more about vetting tenants than you (or me) and I am happy to pay them a fee to advertise my property, conduct viewings and assess a potential tenant, reporting back to me as appropriate. As soon as a tenancy is agreed, said agent withdraws and I take over. It has worked well for me for years and that fee I pay the agent reduces considerably the chance of getting a poor tenant. The not-so-good ones are reluctant to use a High Street agent - they have to pay them a fee as well, after all, and they know that they are less likely to get approved than if they can con an inexperienced landlord directly.

                    P.P.
                    I have been using the NLA's website to reference my tenants via FLS. I have used Maras in the past and was told their credit ref checks were thorough.

                    Comment


                      #11
                      I'll drop into LA today and ask them a few direct questions.

                      Can you provide me with a link where it states that LA's cant arrange someone to be a Guarantor.


                      (LA is a Estate Agent too, a pretty big one in the area, with solicitors upstairs, and mortgage broker. So i hope they are covered for doing this at no cost to me)

                      Comment


                        #12
                        Originally posted by Chicco View Post
                        I'll drop into LA today and ask them a few direct questions.

                        Can you provide me with a link where it states that LA's cant arrange someone to be a Guarantor.


                        (LA is a Estate Agent too, a pretty big one in the area, with solicitors upstairs, and mortgage broker. So i hope they are covered for doing this at no cost to me)
                        I sent another user a PM asking the same thing. To save him/her repeating their reply to you, and incase they don't check the forum before you go to your agents, here is their reply (LZ member - sorry if publishing your reply is the wrong thing to do)

                        The new law is set out in part 3 of the Legal Services Act 2007. See in particular schedule 2 paras 5 (1) (c) and (3) (b)- However the new law only came into force on 1st January 2010. ..... [my edit] there was previous law which is set out in section 22 of the Solicitors Act 1974 (as amended)

                        Comment


                          #13
                          So this law ensures that a LA cannot setup a Guarantor as a Deed, but instead a normal printed form.

                          LA was going to use a normal guarantor form.

                          Comment


                            #14
                            Yes, if the original was prepared by a solicitor (like the link I gave) I believe it is okay. If the agency has altered it in any way, then it wasn't prepared by a solicitor.

                            Comment


                              #15
                              Totally agree with P.Pilcher

                              I have been landlord for 24 years, running private ads does not work for me, the quality of tenant is not good, as they know an agent will do checks.

                              If the property is that good, I am sure you could quickly get another tenant without CCJ, why take the risk ?

                              Comment

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