All posts by DNA Digital

Alarm Bells For Letting Agents Using 3rd Party Referencing

I have already been telling agents to beware of passing over your obligation to referencing agencies and this is now reinforced by a judgment against Blue Sky Properties in Bristol County Court this week.

The case revolves around Blue Sky instructing a referencing company to undertake references on their behalf.

The referencing agency passed the tenants as fit to rent the property but unfortunately the tenants had to be evicted some time later for failing to pay the rent.

When the landlord reviewed the agents file and in particular the referencing forms, inconsistances were found.

The Judge ruled that had all the facts been made known to the Landlord before entering into a tenancy, they would have rejected the tenants. Further that all 3rd party referencing carries disclaimers stating that the details contained in their referencing reports should not be used as the sole reason for making a decision to rent to a particular tenant and that they cannot be liable for any inaccuracy or incompleteness of any information appearing in there report.

Letting agents are also reminder that the Property Ombudsman’s code of practise states “Section 10 of the Code of Practice outlines TPO agents’ obligations when under taking referencing. Regardless of whether a third party referencing provider is used, the agent remains duty bound to consider the results and highlight any potential areas of concern to both the landlord and tenant to allow both parties to make an informed decision as to whether they wish to proceed with the tenancy on the terms previously agreed.”

So my message is beware!

How To Rent Booklet Updated

From today there is a new “How To Rent Booklet” which has been updated and replaces the booklet from October 2015.

You can find the pdf version of the booklet under the following link:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/496709/How_to_Rent_Jan_16.pdf

Also – check the user guide: “Right to Rent Document Checks”.

You can find the pdf version of the booklet under the following link:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/494517/6_1193_HO_NH_Right-to-Rent-Guidance_v9.pdf

Problem tenants? Contact Us.

Written Tenancy Agreement

A tenancy agreement is a legal contract that gives certain rights to both the tenant and landlord, setting out the terms and conditions of the tenancy. The agreement forms the basis of the landlord-tenant relationship specific to your client’s property, as opposed to general statutory legislation rules. For example, your client may not want pets, to insist on payment by banker’s standing order and insist on notice if the property is to be left empty more than 14 days etc.

Never, ever, under any circumstances allow a tenant into premises (handing over keys) without the signing of an agreement, paying the first month’s rent and taking a security deposit, if you have opted to do so. If you accept a cheque, ideally you should allow time for clearance.

What Are The Risks Of Not Having A Tenancy Agreement?

Without the agreement you will find it difficult to prove even the obvious points – when the tenancy actually started, how long it lasts and what the rent should be. Not having a tenancy agreement in writing can create arguments about the tenancy terms between the landlord and tenant; it is created to avoid misinterpretation as well as having proof of an agreement of the terms of the tenancy. A tenant cannot be made to sign an agreement once they have already moved into the property. If you do not have a written agreement you cannot use the section 21 notice.

Good agreements are easy to understand (plain English), up-to-date with current legislation and have taken into account almost all eventualities. Good modern agreements comply with the Office of Fair Trading guidelines. Having a written agreement protects your position and regulates the tenant’s use of the property.

What Should Tenancy Agreements Include?

As a general guideline, tenancy agreements should include the following information:

• Details of all people involved in the tenancy including names and addresses

• Amount of deposit required

• How the deposit will be protected

• When the deposit can be withheld

• Rental amount, when and how often it should be paid

• Method for paying the rent

• Start date and term of the tenancy and the end date

• Bills that the tenant is responsible for

Contact us today for advice and guidance on written tenancy agreements.

Problem Tenants

Problem tenants will always be out there, but there are certain steps that you as a landlord can take to avoid being caught out.

Credit Checks

Always carry out a credit check on prospective tenants, this way you can make sure that the tenant will be able to pay the rent and doesn’t have any CCJ’s against their names or bad credit scores.

Photographic ID

We always recommend obtaining a driving licence or passport photo identification, this is the best way to ensure your prospective tenant really is who they say they are.

Bank Information

If possible aim to obtain the last three months bank statements. This will show the prospective tenants true financial status and you will be able to see if the tenant can in fact afford the rent.

Pay slips

If the tenant works, always aim to obtain past pay slips as above this will give you the fuller picture and shows exactly what income the tenant has.

References

Employers references and past landlord references will also help you as a landlord get a different perspective on the tenant. There is nothing wrong with asking for these.

Guarantors

We always recommend having guarantors regardless of whether the tenant is in full employment or not.

As a guarantor, they should be based in the UK and ideally be a homeowner. This way if the tenant fails to make rental payments or leaves damages at the property, without leaving a forwarding address for them you will still have some re-course.

Inventories

Always use a neutral third party to conduct both check in and check out. There are various companies that can provide a full inventory at reasonable prices, with some even providing video evidence as part of the package.

Having an inventory is key to making a claim on the deposit and avoiding any disputes. The National Landlord Association also provides an inventory service.

It is always worth bearing in mind that all the above information will also help you if the tenant leaves the property owing rent arrears. If you have bank details, work information or a guarantor this makes it so much easier to pursue the tenant for monies owing.

But remember… Prevention is better than cure!