How Do Landlords Choose Between Tenants?

Selecting the right tenant is a crucial decision for any landlord, with long-term implications for both your property and your peace of mind. Here, our landlord solicitors explore the best process for choosing between potential tenants and how to fulfil your legal obligations.

With increasing demand for rental properties and a competitive market, landlords are often faced with the challenge of selecting between several suitable applicants. When landlords choose tenants who are a good fit, this can be an ideal way to protect their investment and provide a smooth, hassle-free tenancy. On the other hand, if you choose a tenant who is not quite right, you could have everything from rent arrears to property damage to deal with.

In this guide, the expert landlord law team at Percy Hughes & Roberts explains the steps landlords should consider as part of the tenant screening process, highlights the legal responsibilities you must follow and offers practical tips to help you choose a reliable tenant for your property.

If you have any questions we have not covered, our specialist landlord solicitors are able to answer your landlord query. You can contact us by completing the enquiry form below or by calling 0151 666 9090.

How Can a Landlord Choose a Good Tenant?

When several applicants express interest in your property, it can be challenging to decide who is the best fit, especially if they all seem like trustworthy tenants. While there is no one-size-fits-all approach, most landlords use a combination of practical checks and personal judgement to choose between multiple suitable tenants.

This usually starts with several key considerations that will screen applicants and separate qualified tenants from those who will not be a good fit. Ask yourself (or potential tenants) the following questions:

• Can the applicant demonstrate a steady income and affordability for the rent?
• Does the applicant have a good credit history, free of significant debts or arrears? You may ask for a credit check or other documentation to verify a prospective tenant's financial stability.
• What is the tenant's rental history like? Have they paid rent on time and looked after previous properties?
• Do they have references from previous landlords or employers who will provide positive feedback?
• Is the tenant willing to sign a longer tenancy agreement or able to move in promptly? This may be a higher priority for some property owners than others, but it can be worthwhile to discuss an applicant's expectations when screening tenants.
• Does the applicant communicate clearly, respond promptly, and appear trustworthy during the interview or viewing?

The goal should be to find a good tenant who will pay rent on time, respect your property, and maintain a positive landlord-tenant relationship. As well as asking these questions of applicants, you can ask for landlord references and other evidence to be submitted along with a rental application, and take certain steps yourself to verify information and narrow down the selection process.

Essential Pre-Tenancy Checks

Carrying out careful checks before offering a tenancy can help you avoid future disputes and financial issues. Here are the key steps landlords should follow:

Step 1: Confirm the tenant's identity and address

Ask for original documents such as a passport or driving licence, along with recent utility bills or bank statements to verify your applicant’s identity and current address. You must carry out "Right to Rent" checks at this early stage and these documents will also assist you in meeting this obligation.

Step 2: Verify employment and income

Request recent payslips, an employment contract, or official proof of benefits. This will help you assess whether the tenant has a monthly income that will satisfy their monthly rent payments.

Step 3: Conduct a credit check

With the tenant’s permission, use a reputable credit reference agency to review their credit score and history. Look for any issues such as bankruptcy, unpaid debts, or County Court Judgments in the credit report.

Step 4: Request references

Contact previous landlords to ask about the tenant’s payment history and how they treated their former property. Employer references can also provide extra assurance that the tenant has a stable income.

Step 5: Consider a guarantor

If the applicant has a limited credit history or irregular income, ask if a guarantor is available to take on financial responsibility if needed.

Completing these steps can give you greater confidence in your choice of tenant and helps to set the foundation for a successful tenancy. These elements can also help the landlord decide between equally qualified tenants who are equivalent in all other relevant respects.

As well as these tenant screening checks, there are other checks that you have a legal obligation to carry out - the most important of which is a Right to Rent check.

Right to Rent Checks

Under the law in England and Wales, landlords must confirm that every adult tenant has the legal right to rent a property. Failure to carry out these checks properly can result in significant fines or even criminal penalties.

This is achieved by a Right to Rent check, wherein landlords verify that prospective tenants are allowed to live in the UK. The scheme applies to all adults living in the property, whether or not they are named on the tenancy agreement, and checks must be carried out before the tenancy begins.

The landlord can carry out the relevant check by requesting original documents that prove the tenant’s right to live in the UK, such as a valid passport, residence permit, or biometric immigration document. For non-UK or Irish citizens, landlords can use the government’s online Right to Rent service. In either case, you should check the authenticity of any documents you are given in the presence of the applicant and make copies for your records.

If you find that tenants have time-limited permission to stay, you must conduct follow-up checks before the expiry date. If a prospective tenant cannot provide evidence of their right to rent, or their permission runs out, landlords must not proceed with the tenancy. Otherwise, there can be legal consequences for landlords and property owners, not only for renting to someone who does not have the right, but for a failure to comply with the requirement to check. Any failures in this area can result in heavy fines or prosecution. Keeping accurate records of all checks provides vital evidence that you have met your legal duties as a landlord.

All of the above checks can make a big difference when choosing tenants, as findings like a poor eviction history or a lack of steady employment could discount some applicants immediately. However, while these checks are important, there are legal protections against discrimination that you must meet - otherwise, you can also face legal trouble.

Understanding Your Legal Obligations

Landlords have several key legal obligations to meet when managing a rental property and during the tenant selection process. Some of the straightforward requirements include:

• Data protection: Any personal information gathered during the application process must be handled in accordance with data protection laws.
• Tenancy agreements: All agreements must meet statutory requirements, and deposit protection rules must be followed.

However, perhaps the most important consideration when reviewing new tenants is to avoid discrimination. When choosing between prospective tenants, landlords must comply with a range of legal requirements designed to protect both parties. It is unlawful to discriminate against applicants on the basis of protected characteristics listed under the Equality Act 2010. These include:

• Race or ethnicity
• Nationality
• Religion or belief
• Gender or gender identity
• Sexual orientation
• Disability
• Marital status
• Pregnancy or maternity

It is essential for landlords to treat all applicants fairly and ensure that the selection process does not discriminate against any individual or group on the basis of any of the above categories. You are entitled to choose the tenant you feel is best suited to your property, but you must not reject an applicant for reasons related to a protected characteristic.

If landlords decide between tenants based on these characteristics, they can face significant legal challenges, including accusations of discrimination which, if upheld, can result in financial penalties.

With this in mind, it is important to choose a tenant based on the process described above rather than any personal feelings. By making sure your selection process is fair, transparent, and fully compliant with the law, you reduce the risk of disputes and help protect your interests as a landlord. If you can demonstrate that your tenant screening process is consistent and reasonable, this can defend you against claims that you have dismissed tenants or applications unfairly.

Tips for a fair selection process

Keeping the following tips in mind can help you to avoid any legal difficulties when trying to find the right tenant:

• Base your decision on objective criteria, such as financial suitability, references, and rental history.
• Apply the same checks and requirements to all applicants.
• Keep clear records of your decision-making process.
• Avoid making assumptions based on appearance, accent, or personal circumstances.
• Be transparent and consistent about the selection process

Make sure your criteria for selecting tenants are clear and shared with all applicants. Consistency and transparency help to protect you from potential claims of unfair treatment and can help you to build a positive relationship with the successful applicant.