a possible workaround for credit checks under the tenant fees ban?
I posted the bones of this post as a comment beneath Victoria Barker's article at (https://news.rla.org.uk/tenant-fee-ban-updated-tenancy-agreement-forms-for-landlords/) on updated tenancy agreements but (as usual) it did not appear, so I am posting it here.
As I understand it, the way the Tenant Fees Act is drafted, applying a proscribed fee under the Act is lawful provided it is chosen by the tenant (or prospective tenant) as an alternative to something which is not proscribed.
It is lawful under the act to require a guarantor (provided the guarantor is not charged fees for eg credit checking, etc).
Before accepting a holding deposit, why not give prospective tenants the choice between providing a guarantor who is a property owner, or paying £32 to fund a credit check for each prospective tenant?
If the first option is chosen, the property-owning status of the guarantor can be checked online for a Land Registry search fee of just £3 (or a full credit check could be carried out if desired at the landlord's expense).
If however the prospective tenant opts instead for the credit check, then in these circumstances it would surely be lawful to recover the credit check fee?
If at the outset the landlord makes it clear that a condition of providing a tenancy is either:
- to provide a property-owning guarantor or
- to pass a credit check costing £32
then if the second option is chosen, potentially not only is(are) the credit check(s) funded by the prospective tenant(s), but also the holding deposit is non-returnable in the event of the prospective tenant(s) failing the check(s)?
My underlying assumption is that prospective tenants choosing not to offer a property-owning guarantor are the ones most likely to have difficulty with a credit check and it seems to me quite unreasonable to expect a landlord to fund potentially several such checks in order to identify a suitable tenant.
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