A warning has gone out to letting agents to be careful about the tenancy referencing firms that they use.
Michael Portman, managing director of specialist firm Let Insurance Services, warned that agents should not cut corners when obtaining references.
He said: “Whilst there is a need for speed and reducing costs, agents should be alert to the risks of potential fraud and meeting their clients’ expectations when selecting tenants.
“Agents also need to be aware of who is getting the references on their behalf. For example, it could be a foreign call centre or poorly trained staff doing the work.
“Also, agents should know whether their referencing company has the processes to allow for investigations into grey areas.
“Many references these days are not straightforward and need closer analysis. There seem to be an increasing number of income anomalies which can include inherited money, non-standard bonus structures and alternative investments.”
According to recent reports from the CML, Paragon and LSL, rent levels have been rising but arrears have been climbing even faster.
Portman said: “The most notable point made in this latest round of surveys is that 12.6% of all rents went unpaid or were paid late in February.
“With one in six households renting, landlords and their agents have to, if possible, weed out the inevitable bad tenants before a tenancy starts, while ensuring that they offer their landlords adequate rent protection policies to cover all possible future risks.”
Ian Potter, operations manager for ARLA, said: “The referencing procedure employed should be clearly stated in an agent’s terms and conditions. Both ARLA and the Ombudsman are very clear about the importance of this.
“Also, landlords should be advised not to take referencing on trust. Agents should remember that many landlords fail to understand that if they are letting their property then it should be viewed as a business.”
Comments
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All references are carried out in the UK and full references are completed free of charge when linked to their rent guarantee.
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The main user of off-shoring seems to be experian and therefore those companies who subcontract their referencing to experian under a white label agreement. My experience is that the language/cultural barriers are not so much of a problem but the cheap Skype-style telephone services that are used making it difficult to hear the operator collecting the reference.
Well said Trevor but it should be a public register. If ever there was a need for a kite mark, referenceing companies should be on the top of the list.
This is, potentially, a very worrying development for letting agents. Perhaps ARLA should set up a register of reference supplier firms and agents can advise when their recommended tenants turn out to be rogues once installed. A league table of the most reliable reference provider firms can then be produced.