The End of Section 21 – Protecting Your Position: Choosing Tenants

This is part of a series of articles for landlords on preparing for the removal of the no-fault ground for possession under section 21.

Part 4. Checking Tenants Properly

Most landlords are worried about losing the right to evict under section 21 because they are concerned that otherwise, they may not be able to evict unsatisfactory tenants.

So it follows that if you are very, very careful in your choice of tenant, you will dramatically reduce the chances of needing to do this.

Now it is impossible to reduce the risk to zero. However, there are a great many landlords who have never had to evict a tenant – largely because of their care in tenant choice. I think I would go so far as to say that tenant choice is the most important thing when renting property.

So let’s take a look at the worst-case scenarios and see what we can do to choose tenants who are unlikely to fall into those categories.

Rent Arrears

This is most landlord’s main fear. So what can you do to prevent it happening? Here are some suggestions:

• Get a credit reference check done – this will let you know if your prospective tenants are being trailed by a string of CCJs – but don’t rely on this alone
• Check their employment status – if they are employed, take a reference from their employer and double-check the salary (and additional payments) that they are paid.
• Check whether their employment is stable or if they regularly change jobs. Someone with regular employment is less likely to want to move away thus avoiding voids.
• Get three months worth of bank statements and check them to make sure that they can actually afford your rent. Make no exceptions to this rule – if tenants object say it is their right to refuse, but also yours …
• If the tenants are on benefit insist on their signing up to a credit union ‘jam jar’ account or the Tasker Payments service and ideally take a guarantee from a property-owning relative.

The chances of a tenant falling into arrears of rent cannot be wholly eradicated but they can be reduced. Also if you try to find responsible people they will be more likely to engage with you if problems arise.

Anti-social behaviour

Often you can spot potential issues in the demeanour of prospective tenants. However, the following precautions will also help:

• Take personal references – some may be primed to give good responses but not all. Some may tell the truth.
• Do searches on social media. This is not a breach of data protection so long as you do not hack into private areas!
• Things you want to look out for are evidence of anti-social behaviour or just things which are unsuitable. For example, a drummer in a band may not be appropriate in a small flat, however, keyboard players can use headphones so are less of a risk.
• Be aware though, when searching on social media, that people often have similar names. That John Smith with the three alsatian dogs may not be the John Smith who is applying to rent your flat.
• Finally – take note of your ‘gut feeling’. If you feel uneasy about someone and you are not sure why – consider renting to someone else. Your subconscious may be telling you something.

Other things to watch out for

There are many people looking to rent property and they are not all what they appear to be. Not a few prospective tenants are in fact members of criminal gangs, looking to rent property (including large rural properties) for criminal purposes.

This is why you need to be very careful indeed to

• watch out for any discrepancies in the information you are given by prospective tenants
• follow up all references, and
• double-check all information provided to make sure it is accurate.

Indeed it is often best not to accept anything as true until it has been independently verified. For example by double-checking addresses, names and the telephone number of all referees and employers. (Tip, you can check a telephone number by putting it into a Google search).

Finally be very suspicious if your prospective tenants offer to pay large sums upfront, particularly if these are in cash and particularly if they seem keen to avoid any inspection visits during the tenancy. These are classic signs of someone seeking to use your property as a cannabis farm.

Further information

We have a lot of guidance on checking tenants on Landlord Law and in particular our New Tenant Checklist will prompt you to do all the things that need doing.

And finally

As I said at the start, the choice of tenant is probably the single most important thing to get right when letting property. If you have reliable, honest tenants, even if things go wrong, you will normally be able to resolve things with them.

I would go so far as to say that it is better, far better, to leave a property lying empty than accept a tenant you are unhappy about – simply because there is no-one else available.  I have seen so many evictions where landlords accepted inappropriate tenants just to avoid a void.

You should also be very wary indeed about accepting anyone else’s recommendations for tenants without checking them out thoroughly yourself.  Don’t just accept them blindly.  Again I have seen many cases where the landlord told me that their unsatisfactory tenants were recommended by someone else and accepted without any further checking.

Taking enormous care in the choice of tenants will reduce substantially and frequently eliminate the need for you ever to have to rely on section 21.