Essential Reference Checks

We are currently in the process of tracking down a tenant we inherited. The owner was dissatisfied with service they were receiving from their old property manager and passed the property and tenant into our hands. The tenant abandoned the property within a few weeks of us taking over management and the matter was referred to the Tenancy Tribunal.

As part of our application and the following debt collection of outstanding payment we needed dates of birth and other crucial information about the tenants. The previous Property Manager would not pass any information they had on the tenant to us beyond the tenancy agreement and rent record. Were they just being difficult due to the fact we had taken over management of the property? Alas, no. They did not have basic information that all Property Managers and Landlords should collect about tenants. This includes photographic ID (Drivers Licence or Passport) for all adult tenants. This would reveal their date of birth which is a key piece of information needed when chasing a debt. We also ask for several phone numbers and alternative address for service so that they can be contacted at the end of the tenancy. We also like to know all the names of the people who will be residing at the property.

These tenants were particularly slippery fish. Our research uncovered numerous Tenancy Tribunal applications against not only the head tenant but also of the other occupants. This should have been picked up when doing background checks and with the knowledge of the tenant’s history they should have never been offered the property.

As part of our regular checks we also check for aliases by combining first names and surnames of applicants. Doing this we uncovered several more Tenancy Tribunal applications against these tenants and currently have uncovered the total of 5 applications where they have abandoned property with rent in arrears and caused damage. This was in the last 5 years! No landlords should ever have to deal with these people. Unfortunately someone has rented them another property and we have a pretty good idea how that will end.

We also Google prospective tenants. This usually can confirm their place of work and other information they have put on the application form. It also can bring up information that helps you decide against them as tenants. The tenants mentioned above had a history of being director of companies that had been struck off and fraud charges brought against them. They changed accountants and addresses for service on a regular basis. Though this is not always an indication that a tenant is going to turn bad. Everyone can fall on hard times. But the information we gathered on these tenants movements over the last 10 years has revealed that they move around, are untrustworthy and would never be able to rent a property off us.

To save yourself undue stress and financial strain you must do the following before signing up a new tenant for a property:

Get a copy of their photo ID. This will confirm their full name and date of birth.

Check the Tenancy Tribunal website https://forms.justice.govt.nz/search/TT/ try variations of all tenants’ names. To get the most possible matches only use the first initial for the first name and first three letters of the surname. Also try the children’s names. If the family have different surnames search every first name with each surname. If you know middle names try them as well.

Do a credit check. Follow up any anomalies.

Google them and see what comes up. Check Facebook, Twitter etc. You could discover they hold a lot of parties!

Verify all referees are who they say they are. When checking work references call the reception of their workplace and ask to be put through, rather than call a mobile number. A mobile can belong to anyone.

If you don’t like what you are seeing, don’t go with the tenant, even if they give you a ‘perfectly plausible’ reason for all the stuff that happened in their past. Badly behaved people tend to attract bad luck. Don’t let it rub off on you.

Liar Liar Pants On Fire!

The dumbest thing a tenant can do on an application for a property is lie. "No, I don't smoke. No, I don't have any pets. No it will only be me and my partner living here, we don't have any kids. No, I've never been to Tenancy Tribunal. Yes, my credit history is good. You can't call my landlord right now, they're overseas. I'm leaving my current property because it's been sold."

These, and many other lies, are just so easy to see through. And if our automatic lie detector doesn't go off immediately, all red flashing lights and sirens, the second line of defence kicks in, the background checks.

I'm not surprised so many people try lying on their tenancy applications - they might just get away with it, and for some people that is easier than being a better behaved tenant. The problem is, when we catch them in a lie, that's it. They don't get to live in the property, no matter how innocent the omission.

Why are we so hard-arse about this? Well, would you give someone you couldn't trust a quarter of a million dollars or more? No way, right? So why should we put a tenant we don't trust into a property worth that much? We are not that stupid.

Trust starts with telling the truth. If the truth isn't pretty, what do you need to do to be a more desirable applicant? Live that life and get better properties. If you are an honest tenant, apply for properties here.

Check your Tenants Carefully

This week we have had two incidences that show how important it is to check tenants backgrounds before you sign on the dotted line.

The first was a tenant we currently have gave notice to vacate (following an 'ugly rent rise'). 'Hooray!' we said at the office, glad to be rid of a grotty tenant who came with the property when we took over management. That's one property we'll be glad to get cleaned up and rented out to a suitable tenant at a much increased weekly rental. However, we had not heard a peep from any prospective landlords asking about their suitability as tenants. Not one. Well, good luck to whoever takes them on, they are about to have their property declared a health hazard.

The second was a prospective tenant who applied to rent a property. They produced a glowing written reference from their landlord who was 'not contactable' having sold the property and moved overseas (yeah right). A little digging by us revealed they had forged the written reference, and had not one, but two, Tenancy Tribunal awards against them for breaching the conditions of tenancy. In my experience landlords rarely take poor performing tenants to Tribunal, so for them to have gone twice in recent history tells me they performed very poorly indeed - how many more times had they caused problems and not been taken to Tribunal? I shudder to think. If they are lying right at the start, you don't want them. If only their past landlords performed background checks. I have no doubt they will find someone silly enough to sign them up to a tenancy based on a bogus written reference.

So, if you don't know how to check a tenants background effectively to save yourself heartbreak and a great deal of work sorting out problems, or you just can't be bothered, call us to do it for you. The money and time we will save you will more than likely pay for the property management fees. And best of all, we guarantee our tenant selection, making your investment property lower risk.