If you have a property which you rent out or are on the other side of the transaction as a tenant wishing to rent a property, you will know all about tenant background checks and why these are important. For a landlord, making informed decisions about who to rent their property to depends on getting information from tenant background checks. These checks can vary between agencies but will usually include basic identity checks, a nationality check to determine right to rent, and a credit check. Agencies may also take references from previous landlords, and perhaps ask for a guarantor if they are concerned about an individual’s ability to pay.
Why do Landlords do Tenant Checks?
Tenant background checks are invaluable for landlords. These checks provide insights into a tenant’s financial stability, rental history, and possibly even their criminal record. This information helps landlords to mitigate risks such as unpaid rent, property damage, and other potential issues during the tenancy. Landlords also have a legal obligation to make sure that the people they are renting to are in the UK legally, under what is known as Right to Rent checks. Landlords who don’t check and are found to be renting to illegal immigrants or visa overstayers are liable for hefty fines.
Information Provided by Checks
The type of check done will determine the information provided, and over what period of time. A Right to Rent check will give information on someone’s status at that moment in time only. Credit checks typically give a six-year financial history, while employment checks can cover a tenant’s entire working life, although landlords typically only look for details from the past three to five years. Agencies will usually ask for references are from the previous two to three landlords. Criminal record checks through Disclosure and Barring Service (DBS) checks will reveal the current and unspent criminal record of the tenant applying to take on the property.
Legality of Tenant Checks
The only checks which a landlord is legally obliged to do are the Right to Rent checks into a prospective tenant’s nationality. While other checks may not legally be mandated, landlords must still make sure they are complying with the Data Protection Act 2018 and GDPR rules. Discrimination based on protected characteristics – for example only running credit checks on women – is strictly prohibited. Landlords must also take steps to protect their tenants’ privacy, and make sure they get consent from the tenants and let them know what checks they will be running, and why.
Dealing With Agencies
In many cases, landlords don’t manage their properties themselves, and use a letting agent instead. The agencies will shortlist potential tenants and then run the background checks as required by the landlord or their policy. Once complete, the agency will pass the information on to the landlord for their decision. One key thing to remember for tenants is that is rarely one piece of information which goes against you. All the checks come together to form one whole picture which the landlord uses to choose the strongest candidate.