Current Figures state that currently 455,000 tenants are in arrears, which accounts for 1 in  8 tenants, so what can you do to prevent becoming affected by unscrupulous tenants?

The key to protecting yourself from bad tenants mainly comes down to having the correct referencing procedures in place before the tenancy begins, to deter any would be defaulting tenants from choosing YOUR property! Make it difficult for anybody “hiding” something or pretending to be someone they are not from getting into your house.

Some tenants that fall into rent arrear’s, are genuine cases, but in most situations i have found that the genuine cases will do anything to resolve the matter like rent a smaller property, move in with relatives, make an arrangement to pay or apply for housing benefit pretty quickly to avoid any bad debts. Unfortunately, there are many more that fit into the other category and either default on their rent because “they know how to get away with it”, but there are also many “professional tenants” out there. These are not professional as in professionally employed, but who make a living out of unwitting landlords who make hasty “judgements” and spend months or years regretting it.

To protect yourself from getting a tenant that is going to bleed you dry, you want to build a picture of who they are and what they are about with your investigations before they move in.  Have a strict “application” process to find out, where they work, what they do and how long they have been there, but also find out how much they earn is it part time or full time too. If they have been with their employer for less than a year ask for previous employment references as well, remember never to take a mobile number for an employer, it could be their best friend.

Ask for their National insurance number (in case you have to pursue them for bad debts later) and their next of kin’s details, always very useful if they stop paying or run off!

One of the most useful references you can get from a tenant is a previous landlord reference, the problem with the “current landlords reference” is that you are unlikely to get the truth. Most landlords stuck with a tenant from hell would find it very difficult to give an honest reference to any prospective landlord knowing that doing so means that the tenant would not be able to leave, this is why the “previous” landlord is the one to go to for honesty.

Proof of ID and Proof of identity nowadays is so important too as people will not think twice on impersonating someone else, take a copy of their id (in black and white) and keep it on file, as you may need it later.

Use a good referencing format, either use a credit checking agency and conduct the references yourself or utilise the services of an outside referencing company, but either way get involved yourself and be sure YOU are happy with the results as some referencing companies are not very strict on the criteria and many will not pass on their findings to you, so you end up accepting the tenant with very little information (not much use if you need to pursue them later in court) and on the referencing companies word.

If you do the credit searches yourself make sure that your tenant’s signs to allow you to take references on them and then credit search them, looking for any county court judgements or alias addresses, we always search the alias addresses too. Something else to check out is the voters roll register that comes with the credit search. If they haven’t been registered on the voters roll for an address they are “claiming” to have lived at, then ask for proof of address at that place, like a utility bill or mortgage statement for example.

With the deposit always take a little bit more than 1 month’s rent. The reason for this is if you take only 1 months rent as a deposit, then the tenants seem to just stop paying a month before the end of the contract, and therefore you end up with arrears or no deposit, but merely taking an extra £100 on top generally prevents them from doing that, as then they feel they are jeopardising the £100.

But the real defence if you are at all unsure is the taking of a guarantor but beware! Not anyone should be a guarantor, make sure they are a UK Home Owning guarantor. Guarantors that are in rented accommodation rarely pay up and just move when you start chasing them. Make sure that you take the guarantor through the same referencing as the tenant (we insist on them earning 40 times the monthly rent per annum too) and get proof of them owning their own home, like a mortgage statement for example.

If you follow these procedures and in the event of any problems later are very strict with your arrears chasing, you are unlikely to suffer from the worst of the tenants that are out there.