Can I contract that any new tenant provides their own reference?

Hi Jamie,

Please see my editors notes above, but I think you are scuppered on the reference idea by "You cannot require them to enter a contract with a third party"

Hi Jamie you need to be ultra cautious but you may be able to recover up to £50 on a change of sharer - see https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/819634/TFA_Landlord_and_Agent_Guidance_190722.pdf starting at page 54

Alternatively you may be able to say: All the tenants remain liable until the end of the tenancy but if a suitable person comes to me with a satisfactory reference from a previous landlord I will consider allowing them to be substituted. The tenants will probably be OK with that.
Unfortunately, until we have some case law (and some hapless landlord is fined thousands for asking for £30 to cover his increased costs and the court decides it should have been £25) we won't know so I am not guaranteeing this will not get you into trouble later. Also if the tenant turns round later and says "Repay me the cost of the reference and the amount I have paid you or I will report you to the Council" you have a choice: repay the £30 or spend hours dealing with the local council and face months of uncertainty and the risk of a substantial fine.

As Neil Says "You cannot require them to enter a contract with a third party." However you could suggest that applicants with suitable references will be given preferential consideration but they are not 'required'.

But then I thought, surely 'applying' to view a property is different from 'granting' a tenancy?

The act does define what is a requirement in consideration of granting a tenancy but at what point do you draw the line between applying for and granting a tenancy?

Reply to the comment left by Steve Masters at 15/11/2019 - 11:26
If an agent charged applicants a fee to register on their online property finding portal and they subsequently signed a tenancy, would that be considered a prohibited fee?

I think Jamie’s specific question has been thoroughly answered now, but I have a related question which I’ve been wondering about since the tenant fees ban came in.
After the ban came into place I initially required the applicant to sign up to a free credit referencing service such as Clear Score and to provide me with a copy of the report. I would then carry out my own landlord and employment checks, however I then became concerned that this may fall foul of the Data Protection Act in that it may involve the applicant providing personal information which was in excess of that required by me to make an informed decision. To be honest I haven’t yet sat down and reread the act to evaluate that, but this question has reminded me about it. I was also concerned that I may lose potential applicants who felt this was too invasive.
What do others think about this option?

Reply to the comment left by Steve Masters at 15/11/2019 - 11:26
I believe that charging a tenant to view a property, or receive details in advance, has been unlawful for many years.

Reply to the comment left by Kate Mellor at 15/11/2019 - 11:39
Kate
As a landlord you should be doing all you can to reference your tenants. Employers' and former landlords' references are a vital part of that referencing.

Strictly speaking, as a landlord you should be registered with the Information Commissioner's office anyway and be holding data in accordance with those rules. Remember that data will include the tenants' contact details (otherwise how would you contact them?).

This is an area where landlords are fully treated as running a business.

Any tenant not willing to be properly referenced should be avoided.

Kate
In section 1 of the Tenant Fees Act it says:
1 (2) A landlord must not require a relevant person to make a prohibited payment
to a third party in connection with a tenancy of housing in England.
1 (3) A landlord must not require a relevant person to enter into a contract with a
third party in connection with a tenancy of housing in England if that contract
is—
(a) a contract for the provision of a service, or
(b) a contract of insurance.

Arguably you are requiring the tenant to enter into a contract with Clear Score to provide a service. The fact that the service is free is not decisive. The question is whether there is a contract. The draftsman of the Act probably assumed that entering into a contract would entail payment.

As others have said regarding fees.

If I understand correctly, you have a joint tenancy for a fixed term and then It naturally goes into a periodic.

During the periodic if 1 tenant wants to stay and 1 wants to leave you ask the leaving tenant to find a replacement and make them responsible to do this?

If a periodic 1 tenant just has to give 30 days notice to leave and naturally being that joint tenancy to a close.

You can only require an existing tenant to find a replacement during a fixed term tenancy (not a periodic) and during the fixed term once a suitable replacement is found you can then use the assignment process to and charge £50 or “reasonable costs” in relation to the assignment process.

This actually makes me wonder.

Could you ask "Are you signed up to a credit reporting agency" and if they say yes, could you then ask for a copy? You would not be asking them to enter into a contract, as they are already in one.

As for the information you request, I am comfortable with providing references from employers and previous landlords. My credit report is getting a bit more invasive and I would prefer that you see that I have a clean record without defaults without seeing precisely who I have debts with.

Any landlord that would ask to see my bank statements is going way too far into intrusiveness in my mind.