The Association of Residential Letting Agents says the costs of tenant referencing must be exempt from the government’s proposed ban on letting agents’ fees imposed on tenants in England.
ARLA, in a note to members and released to the press, says the reasons for this are manifold.
“Referencing ensures that tenants do not take on a financial commitment which is unsustainable. Referencing reduces the risk of tenants falling into rent arrears which often results in them being evicted and subject to County Court Judgments.
“This can lead to a drop in credit rating and difficulty sourcing other rental properties or making successful mortgage applications, along with difficulty sourcing low cost credit from mainstream suppliers. Quality referencing helps to reduce homelessness.
“While it is frequently said that referencing is available for a few pounds this is not accurate. Our primary research has shown that agents list referencing as one of the single most time consuming aspects of the role.”
The association insists referencing is not simply a case of sending a form to a third party; it is frequently a complex process which is in part required by law and made more complicated by government initiatives like Right To Rent.
“Referencing involves ensuring forms are completed properly, making requests to referees and guarantors, checking a tenant's credit history, liaising with an external referencing company, collecting employment evidence and information from previous landlords, checking passports or other documentation, storing copies securely and scheduling and carrying out follow up checks where legally required.”