Referencing a potential tenant is an important process when considering who'll live in your valuable asset. It's the point of first impression that helps build the person's character, lifestyle, and overall perception both on paper and in your head. It helps build an idea of how they'd be to deal with in future, and how they would potentially look after the property.
Firstly, the legal obligations should be at the forefront of your mind. Physically seeing and taking copies of Photographic Identification will allow you to firstly check the documentation is authentic. Then to prove that the applicant is who they say they are.
Additionally, A Right to Rent check is simply a check of legal documents, such as passport and/or immigration documents to ensure the applicant has the right to be in this country. You may come across a case where the applicant has applied for a 'Settled' or a 'pre-Settled' status from the EU Settlement Scheme. In this circumstance they should have a 'Share Code' or a 'Certificate of Application' to prove they have the right to rent.
In the case of the applicant/s documents being with the Home Office, you may make a request to the Home Office for a right to rent check. Receiving a response should take no longer than a couple of working days.
If the applicant has lived in the UK since before 1988 but doesn't have documents to prove so. They should inform you of how long they've lived in the UK, and you contact the Landlord Checking Service who will let you know whether they have the right to rent and supply you with the relevant documents.
Then we move onto the recommended documents, these will help give you a better understanding of the person's background, spending habits, lifestyle, career stability etc. This step should definitely not be overlooked and is vital to finding the perfect tenants.
Obtaining a document that shows the proof of their previous address, helps correlate the last few documents I've just spoken about. This could be a photocard driving licence, bank and/or credit card statements, telephone, internet, or mobiles bills. There are no set documents, and it can vary depending on personal preference.
Copies of a period of bank statements can be requested, the common term being the previous 3 months. This will help gauge the applicant's long-term spending habits to give a good idea on how well they manage their money, as well as commitment to paying for rent. Keep an eye out for ones that seem to consistently sit closely to a £0 balance or fall into an unauthorised overdraft. This could be seen as displaying bad money management.
For employed applicants, obtaining a period of their previous three months' payslips shows commitment; it'll prove they've been in continuous employment for at least three months. It should provide some reassurance that they are of good financial standing and are able to comfortably fund their living expenses.
For self-employed applicants, an SA302, also known as a self-assessment tax return, will help give a clearer understanding of their income. It will show figures relating to payment from all employers, profits from UK land and property, dividends, or profits from UK companies etc. It'll help piece together a better idea of their financial income situation.
In addition to the previous documents, asking the applicant for an employment reference is a useful tool. The employer will want to be viewed as in good standing in their field, so will generally only give a glowing reference to candidates that are worthy of it. Further down the line, if the applicant causes issues the last thing they want is it to reflect negatively on their company. Be wary if your applicant is hesitant in providing you with a reference. In the case you do get one, be sure to crosscheck the information given by contacting the company directly to ensure all details are accurate, and most importantly, they were the ones who wrote it!
And finally, a landlord or agency reference. You can request a reference in relation to their previous property (if applicable), generally most landlords and estate agents will draft a quick reference to reassure you the applicant is a good tenant. However, be aware that in some circumstances references will be falsified to make a bad tenant move out, and essentially be someone else's problem. (YOURS!)
We'd suggest you heavily rely on the remaining documents to help you make an informed decision on what the potential tenants are like. Make a judgement that is best for your needs, and most of all, don't rush!
Take this time to build rapport with the applicant you find most suitable, it will help you gauge a better idea of what they are like as a person, how forthcoming they are with issues. And essentially helps keep a good standing between you all throughout their tenancy in your property.
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