10th March 2018
Q: My tenant has signed a tenancy agreement and is due to move in next week. However, he has not passed referencing. What should I do?
A: What a great question.
There are generally two methods of practice in the industry for referencing and contracts; most agents will wait for tenants to pass references before any contracts have been drawn up and signed; whereas landlords who do the admin works themselves often end up signing a tenancy before references are back (not recommended).
If you have an agent working for you, then now is the time to apply the pressure and give them a call, as they should be keeping you up to date with the progress. If you are handling the referencing yourself then the first step would be to put the onus on the tenants and explain that they cannot have access to the property until such time that they achieve a pass, inform them of what documents they need to provide or indeed who’s response you are awaiting. Get them on the case as well as you, this could be the difference between still waiting and a pass that you need.
If this is still not working, for example due to their referee being on holiday, then possible solutions you could choose are:
- allow them to move in without the reference (not recommended);
- tell the tenant they are not starting the contract on the agreed date and you will have to redraft another agreement (you may face an angry tenant even though it is not your fault);
- you may even have the possibility of the tenant pulling out and having to start the process all over again; or
- this option is less likely to work – you could explain to the tenant that you are still happy for them to take the tenancy, however, they would only be allowed access and keys to the property once there has been a pass on the references. The catch (which you MUST explain) would be that the start date on the agreement stays and the rent is back dated to this day, and not from the day they move in. For this to work, you have to be on either good terms with the tenant or hope they have no other property lined up.
More often than not a tenant may offer to pay two or three months in advance; however, don’t bite their hands off at this time, as this might be the last payment you see from them once the money has run out!
There are plenty of other routes you could go down, such as six months advance payment, guarantors, higher deposit and so on; however, without the references you have no idea who you are letting in and what type of tenant they will be!
If you have found yourself in this situation before then I would love to hear from you to find out what you did; or, if you are currently in this situation then please feel free to give me a call in the office.