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This is why most real estate agents do reference checks on potential new tenants


It is crucial for real estate agents to carry out a thorough referencing or screening process before renting out their property to new tenants. Being a real estate agent is not an easy task. You must follow all the rules and regulations as stated by law before making any final settlements; carrying out a reference check is part of that process.


This is why most real estate agents do reference checks on potential new tenants:


What Are Reference Checks And How Do They Work?

As a real estate agent, you will need to thoroughly vet potential tenants to ensure that they are trustworthy and will be able to pay their rent on time each month. Credit qualifications, employer verification, and past landlord references are some of the items that you must check off your list.


A reference check is mandatory for all adult renters aged 18 and above, who are involved in the Tenancy Agreement. Most significantly, landlords must ensure that their renters have the legal right to reside in the city or country. Failure to complete or fulfil all of the required documentation as mentioned under the regulatory laws can result in a fine or possibly a prison sentence. Therefore, it is critical that they are done correctly.


Is it Necessary to Obtain References from All Tenants?

Yes. All adult renters must be named on the Tenancy Agreement, and all tenants must have a reference check done regardless of whether they are contributing financially to a part of the rent.


Tenant referencing is an important component of the renting process since it ensures that the landlord's new tenants are who they say they are, work where they say they work, and can afford to pay the rent. Acceptable referencing reports are also a prerequisite for rental agreements, which is a type of insurance provided to landlords in the event that their renters fall behind on their rent. Most Rent Guarantee insurance policies require either valid references or a guarantor from the tenants. Landlords or real estate agents must cooperate with any reference requests made by their insurer; otherwise, their insurer may refuse to pay out in the event of a claim.


In their desire to save money, agents ignore the value of tenant referencing. It goes without saying that knowing who is moving into your home is essential; after all, your home is likely one of your most valuable assets, and you obviously would not want just anyone moving in.

Evicting an unfit renter can cost thousands of dollars in terms of both time and money, so trying to save money from the start by avoiding reference checks could backfire and cost you a lot more in the long run. Obviously, appropriate tenant referencing minimises the risk, but a renter losing their job, changing their personal circumstances, and being unable to pay the rental fee, although through no fault of their own, remains a possibility. As a result, we encourage real estate agents to take further precautions by getting enough rent warranty coverage. A rental warranty will cover legal expenditures and lost rent, including court costs, if a tenancy goes wrong.



The importance of referencing should never be ignored. Now more than ever, it is critical that all real estate agents understand the necessity of tenant referencing and how meticulously it should be carried out in order to minimise the impact on new tenancies.

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