View Full Version : Previously bankrupt and self employed
29-09-2011, 17:59 PM
We had a couple come and view our property yesterday and loved it, and made an offer to rent it.
I e-mailed details of what we needed for tenant ref and lady rung back to say that as her partner was self employed he did a lot of cash in hand work so self-assessment forms do not accurately reflect earnings. She also mentioned that he'd been declared bankrupt 18 months ago due to overstretching himself on a mortgage.
My instinct is to run away screaming.
However, they are happy to provide a guarantor and also two months rent in advance as the deposit (and yes it will go into TDS). They are in rented at moment so I guess I can also get a landlords ref (although, how can I be sure it's for real - any tips gladly accepted).
Should I still run away screaming? Have always gone through normal tenant ref channels but I feel I should at least try and see if there's a way round. There by the grace of God etc...
Should I still run away screaming?
If self employed with contacts for work, why should he have to move ?
always be wary of pleople who say "They love it, and want to move in now"
as it puts you in the situation it has been designed to put you in - -
Trusting them !
There are more than 2 people in Britain that would rent your place, so if
you can't do tenant ref checks, or the checks come back negative ( cos he
can't prove earnings ) then say No thank you.
What would you do if someone in a full time job, earning "lots" of money",
came back from a tenant check as -- "failed the check" -- would you be stupid
and let them rent from you ?
The couple will fail a tenant check, so dont rent to them.
29-09-2011, 20:18 PM
I'd also wonder about their honesty - if cash payments don't go through the accounts then that can mean only one thing - someone is on the fiddle.
30-09-2011, 00:41 AM
Whilst I don't disagree with ram, Smorkerz or OPs gut reaction, I would suggest wife has been more open than many Ts by volunteering info before checks, suggesting detailed checks are reqd ie in what trade is husband self-employed, what is the background/terms of bankruptcy order, did he take IVA route? Poss OP should als interview all candidates in person, ask searching questions to evaluate credibility. Sounds like OP os not using a LA but dealing direct, prime target for dubious prosp Ts.
The key person to check is proposed G. As a min s/he should be employed with min determined income AND be a property owner. Keu G checks would be credit ref check, employer ref and Land Registry checkfor ownership and any pre-existing charges on property)
All G paperwork reqd should be watertight ie G Deed making G resp for Ts rent and damages for duration of Ts legal occupancy. With this in place, is it nec for Ts to provide a deposit? Benefit to LL-no deposit protection hoops to negotiate, benefit to T=improved cash flow to maintain rent payments. Suggest min initial AST of 6 months.
OP has not indicated type, rent or location of property. Suggest she defines her preferred T and does some local market research.
30-09-2011, 07:00 AM
On this one if I wanted to go ahead I'd try and get a handle on the stability of the business as well as on the guarantor.
Though having been bankrupt does not look good! But was it a genuine mistake and is he actually good? What was the record before that?
If you *can* bottom that, then you could end up with a long term tenant who would not move away easily. But it's a risk. The question is whether you can reduce it to an acceptable level.
I'm torn by this checking issue, but for the business I'd be cautious. I'm not sure how secure the 'employment' check is in all cases, unless you check the employer too.
Self-employed is a red flag, as has been indicated above.
Yet there are 10-20% (my guesstimate) self-employed in the workforce.
The roofer I'm having this morning is self-employed, as are other tradesmen I use, who have been around for years.
Even my EPC man, who is a former (very) senior policemen, yet is also more or less a one-man-band, so he wouldn't qualify for a tenancy on some checks.
30-09-2011, 07:09 AM
Sounds like OP os not using a LA but dealing direct, prime target for dubious prosp Ts.Mm. I received a text last night enquiring after a property I'm currently advertising, having seen my number on my 'to let' sign: "is this a private rental?" - haven't called them yet but that rings instant alarm bells for me.[/quote]
All G paperwork reqd should be watertight ie G Deed making G resp for Ts rent and damages for duration of Ts legal occupancy. With this in place, is it nec for Ts to provide a deposit?I'd say so, yes. Two reasons: (a) having paid a deposit of their own hard-earned makes tenants inherently more likely to look after the place; and (b) if a tenant has so little cash behind them that they are unable to come up with (say) two months rent at the outset, then it's highly likely that they'll struggle to find monthly rent payments at some time.
30-09-2011, 08:23 AM
I advertised on Gumtree as the agents that I was with were not coming up with anything. The house is a four-bed detached in a pretty nice area of Kent: nowt wrong with it, just very picky client base (one excuse has been "there are housing association properties nearby").
TBH, it all sounds like too much of a bother, my OH feels that they were good for the rent but there is nothing to prove it. If we request landlord ref, how can we prove that the landlord is bona fide, not some mate of theirs? Etc etc. And am slightly pi**ed off that he does not appear to be paying any tax...
30-09-2011, 09:15 AM
Just one more thing, if I get a guarantor through checks, how do I 'link' him/her to the property or the prospective tenants? Is there a clause written into AST, or is it by default of having volunteered as a G?
So let's say guarantor comes back fine, landlord ref is fine, two months deposit in TDS - put both names on agreement, would you add any more clauses?
Wish LA would pull their fingers out so I don't have to deal with this...
Wish LA would pull their fingers out so I don't have to deal with this...
As you are paying them, get their stance on guarantor.
But hold out for working tenants. Surely people in Kent work ?
Ask yourself why you are hell bent on bending over backwards to rent
your house to someone who can't prove their income.
Protect your property .. Working families first.
You do know that gumtree is often frequented by those who do not have
much money !
But that can be said of any of those types of websites.
30-09-2011, 10:26 AM
If we request landlord ref, how can we prove that the landlord is bona fide, not some mate of theirs? Etc etc.For a start you could pull the Land Registry record for the address they say they've rented to get the name of the owner (and with luck, an address) - hopefully that tallies with what they tell you (if not why not?). Ideally get a written reference and then speak to the putative landlord, but don't rely on a phone number provided by an applicant, track it down yourself. Just the sort of technique I always use when obtaining references tenants employers and former landlords.
For example, an applicant says she works at Tesco, her line manager is Joe Bloggs and here's his direct line. I then Google Tesco's number, phone their HR department and ask them to verify that Joe Bloggs is indeed the line manager of Anne Applicant. They probably shouldn't tell me, but they usually do.... I then phone the switchboard and ask to be put through to Mr Bloggs.
Trust your instinct! Better to wait a bit longer than have no rent for many months.
30-09-2011, 11:39 AM
RAM, the house has been on market for three months, dropped price to well under going rate, LAs can't understand why it hasn't gone. I'm trying everything hence Gumtree (but have given up as am getting so much BS from some people). So am bending over backwards because they could be straight up, telling us the truth, and end up being good long-term tenants, but I want to cover my back and make sure that if they are scamming us, I can uncover it.
Would rather that LAs could find us tenants though...
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