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  • Buy-to-Let

    How to handle referencing after fee ban?

    Interested to hear how other self-managing landlords will handle tenant referencing after the tenant fee ban is in place from 1st June (next week!)

    I used to take a small fee to cover their referencing or get the referencing company to contact the tenant and take payment directly from them. Of course with the new ban, none of this will be possible. 

    Interested to know what your strategy is going forwards so that you are not out of pocket (e.g. paying to reference a tenant that is no longer interested, tenant fails referencing, etc).

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    I'll pass the cost on with the rent if possible else will absorb it.

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    Not sure how that is practical.

    E.g. A potential tenant registered interest in your property. 
    You pay to reference said tenant. 
    Tenant fails referencing. 
    You then call tenant to let them know they have failed
    Tenant replies with the following... "What? Who's this? Ohhh yeh ermm it's fine I found somewhere else..."

    The point is the tenant can make multiple offers for different properties and leave it to the landlord to reference them. I don't see how increasing rent will help. 

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    Yup - that's a risk you take - although meeting the tenants beforehand and doing a level of pre-screening certainly helps. 

    Let me know if there is a way round it - I'm all ears...

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    It's a risk you don't have to take. See my latest comment at the bottom of this thread. The holding deposit could be our saviour.

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    This forces you towards using agent as only they (iirc) can make deductions from a holding deposit if the prospective tenant "deliberately" misleads you.

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    Orson not sure what you mean by this. Are you saying the landlord can't make deductions?

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    I think you're wrong there. Have a read of this, there is no mention of an agent being the only ones able to make deductions.

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    Yep, looks like I'm wrong. We always use agents because, in the past we've wasted so much with people not turning up for appointments etc. 

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    Where have you read that only agents can keep part or all of the holding deposit please?

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