Undoubtedly, tenant screening is one of the most important parts of the process when taking on someone new to live in your rented property. Finding the right tenants can be a real challenge and when you get it wrong, it can make your life really difficult.

There are no guarantees with any tenant – even one who ticks every box before signing the lease can cause problems once they have moved in. The tenant referencing process, however, is designed to make sure that you take on someone trustworthy and reliable. But what happens if you find a new tenant and they have bad references?

Here, we at CIA Landlords have taken a look at why my tenant has bad references/

Why are tenant references important?

When you are screening a prospective tenant, you should always ask them to provide references. When they provide these references, you should then follow them up to confirm their validity. References serve as a way to get to know your tenant in all the necessary ways before you decide whether or not to rent to them.

Ideally, they should provide an employer reference, a financial reference, and a previous landlord reference, if possible. If the tenant has rented in the past, you should try and get references from every landlord that they have rented from in the last three to five years.

Previous landlord references

Previous landlord references are arguably the most important references that you can get your hands on. When you speak to the previous landlord, make sure you ask whether they found the tenant trustworthy, if they had any problems with paying their rent on time, and whether they looked after the property. You should also ask them whether they would rent to this person again.

If you receive negative information from the landlord, it is important to consider whether they are truly being open and honest with you, or whether they are being unfair and negative. It’s difficult to know the full story and it may be that the prospective tenant is receiving an unjust bad reference. If things don’t sound good and you have reason to believe that the landlord is being truthful and fair, then it may be best to find someone else. If your tenant has never rented previously, or cannot provide a previous landlord reference for whatever reason, see if you can speak to their parents or get hold of a financial reference. This could be payslips, bank statements, and/or a letter from their employer to confirm their salary.

Image of a tenancy agreement contract.

Employer references

Unless your tenant is unemployed and on benefits, you need to know that they are earning enough to able to afford the rent. That’s why it is a good idea to get an employer reference. When you speak to an employer, you should find out the prospective tenant’s salary,  how long they have been with the company, whether they work part or full-time, and whether their employment is secure – especially in these current times. Some employers may be more receptive than others in releasing this information, but if you can at least confirm their salary, then that is the most important thing.

What if a tenant refuses to give references?

Although there is little way of finding out the whole story, if a tenant refuses to provide references, then it’s probably safe for you to assume that they are hiding something. If they don’t want you to speak to a previous landlord, then you have the right to conclude that it’s because the landlord won’t have good things to say about the tenant.

Image of a typewriter with a paper with the word cancel on.

With so many tenants competing for properties, if you come across a tenant who cannot pass the referencing process or refuses to provide references, there will probably be a handful of other tenants who will. It’s probably not worth taking any risks that you might come to regret later down the line. There is no way to completely protect yourself when it comes to choosing a tenant, however, following all the right screening processes is a good place to start. At least if things do go wrong, you know you did everything you could to ensure that you found yourself a good and reliable tenancy. A tenant with bad references will always be a risk – but ultimately it is your decision and every tenant and their story will be different, so treat it on a case by case basis

Tenant discrimination

Yes, bad references may rightly so put you off renting to a tenant. But during the whole tenant screening process, remember that tenant discrimination in housing is covered in part 4 of the 2010 Equality Act. You cannot reject a tenant on the grounds of ‘protected characteristics’, such as disability, gender, race, sexuality, or religion.

An extra step you can take to give yourself peace of mind is to take out a landlord insurance policy. This can cover you against loss of rent, malicious damage caused by tenants and more. It doesn’t have to cost the earth to get insured either! Many of CIA Landlord Insurance’s partners offer cheap landlord insurance whilst keeping you protected.

We won't be beaten on any like for like landlord insurance quote.

Get a quote