You’ve found a tenant…… but what next?
Now that you’ve located a tenant that you feel is a good fit for you and your property comes the complexity of setting up the tenancy.
First of all have you discussed with the prospective tenants that you will need to obtain references in respect of a previous landlord and employer as well as a credit search? Always ask them to pre-warn the referee’s to be able to speed up the response time to the reference request avoiding any unnecessary delays.
Agree a start date for the tenancy so all parties know a date they are working towards.
Paperwork you will need from the tenants:
Copy of passport – you will need to see the original passport as part of the right to rent checks later
Copy of driving licence as proof of address or a utility bill dated within the last three months.
With the new GDPR data regulations which came into force on 25th May 2018 it would be advisable to get any new prospective tenants to sign a form which advises them of how you intent to use their personal information, where and how you store it as well as how long you will store it for.
Obtain references - this can be something you do yourself or you can employ a referencing agent to do this on your behalf. You are looking to do a credit search to check the applicants last 3 years of addresses and that they don’t have any adverse credit in the form of a CCJ, IVA or been declared bankrupt. A previous landlord’s reference to clarify the rent has been paid on time and the property looked after. Also an employer’s reference to clarify employment status and earning. If a referencing company does this on your behalf they will be looking for the prospective tenant or tenants to earn 30x the rent a year, for example, rent of £1000 per month, applicant(s) will need to earn £30,000 per year between them.
If you are obtaining the credit search and references yourself make sure you obtain written references to enable you to keep hard copies. If you have a rent and legal insurance policy the terms will require adequate references to be obtained which they may ask to see sight of.
Right to rent checks - Landlords now need to check the immigration status of every tenant over the age of 18. Certain documentation is acceptable and sight of the original documentation is crucial, for more details please visit https://www.gov.uk/check-tenant-right-to-rent-documents/how-to-check. If a referencing agency has done the references they will offer a right to rent check service too.
Draw up the Prescribed Forms and Assured Shorthold Tenancy Agreement in plenty of time to allow the tenant(s) enough time to read and understand the documentation before signing. A few suggested websites to obtain a sample Tenancy Agreement are as follows:
The details on the prescribed forms will depend on which tenancy deposit scheme you are using to register the deposit. Each website will have a mock up prescribed forms to follow.
Upon issuing the Tenancy Agreement to the tenants for their perusal you also need to provide them with the governments how to rent booklet
Whilst you are waiting for the tenants to read the Tenancy Agreement, sign and return it to you. You can organise a date all final monies need to be received and cleared into your account, along with organising a Check In to be done on the tenancy start date. This can be an appointment where you meet the tenants at the property to do a written and photographic report to show the condition of the property at the beginning of the tenancy or you can employ an independent Inventory Clerk to do it on your behalf. This will help with any deductions you wish to propose from the tenants deposit at the end of the tenancy.
Register the security deposit with one of the government regulated schemes. This needs to be done within 30 days of receipt of the deposit not from the start of the tenancy. The three approved schemes are as follows:
www.tenancydepositscheme.com www.mydeposits.co.uk www.depositprotection.co.uk
On the day of move in you need to provide the tenants with an executed (fully signed by all tenants and all landlords) copy of the Tenancy Agreement, How to Rent booklet, gas safety record, Electrical certificate (if applicable) EPC, Inventory/Check In Report and the deposit certificate if you have already registered it, if not you will need to provide this to your tenants as soon as possible. Proof of providing these documentations to the tenants is crucial and needs to be kept, otherwise if you wish to terminate the tenancy via a section 21 at a later date you won’t be able to. A simple document listing the paperwork you have provided to the tenants and getting them to sign this will be adequate alternatively an email showing the attachments having being sent to the tenants on the day of move in.
To recap as a short tick list, the bits you will need are:
1. Agree a tenancy start date with the tenants
2. Get all prospective tenants to sign a GDPR advise sheet
3. See original passports for all tenants and have hard copies for your records
4. Get proof of address in the form of a driving licence and or utility bill dated in the last three months
5. Carry out credit search and obtain previous Landlord and employer reference’s
6. Complete right to rent check on any person over the age of 18
7. Issue tenants with personalised prescribed forms and Tenancy Agreement along with a copy of the governments how to rent guide
8. Organise with tenant to pay move in monies
9. Register the security deposit with a government regulated scheme
10. Organise with the tenants for a Check In to be done at the start of the tenancy
11. Issue tenants with keys (this can be part of the check in process)
12. At the commencement of the tenancy provide the tenants with a copy of the executed Tenancy Agreement, how to rent guide, gas safety record, electrical certificate, EPC, Inventory/Check In Report and deposit certificate - proof of issue needs to be kept.
The above list is a brief overview and hasn’t gone into too much detail on each step. If you would like some further clarification or have any property related questions please don’t hesitate to get in contact.