Should I sue the letting agent or the referencing company?

Hi Neil,

Can I ask what reference checks were carried out and the results?
Also for what reason did the tenant stop paying?
Was there a history of nonpayment and adverse credit?

This will help build the picture for us to comment on.

Reply to the comment left by "Neil Patterson" at "16/05/2017 - 13:56":

The tenant advised on the application form an accurate current address but to avoid a landlord reference stated that they were 'living with family/friends', in reality they were being evicted by their current landlord with £10,000 of debt. The reference agency checked the address from a bank statement but not the status of their living arrangements.

The reference agency advised that the tenant was receiving a private pension from the local City Counci and that they had evidenced this during the referencing process, this was incorrect. When queried what evidence they had obtained they referred to copy bank statements. The amounts in question appeared on the bank statement but were in reality housing allowance, they had no evidence of a pension and had just assumed this was a pension,

In addition they had a pension statement from another company and a P60 showing a very similar figure, in reality they were one and the same income source but the ref agency double counted this.

he report provided to us simply stated that the total income was £35,000 and met their affordability criteria (£1,100 per month x 12 x 2.5 = £33,000), in reality the tenants income was only £20,500. All of the information above only came to light when requesting a copy of the referencing agencies file at a later date

The tenant simply couldn't afford the property, they were constantly late and eventually stopped paying altogether once notice had been served.

It sounds very much like the referencing company did not do their job to me.

Is there a regulatory body they belong too?

Reply to the comment left by "Neil Patterson" at "16/05/2017 - 16:10":

no unfortunately they are not a member of any regulatory body

I agree, your contract is with the letting company and I would peruse this route further by seeking legal advice - make sure TPO are aware that you do not accept their conclusion. If your terms of business mentions the referencing company that they use and you have signed in recognition of this then there may be some legal implication there. The tenants have been fraudulent, however, they are unlikely to fund any prosecution costs. I would not use a letting agent that won't share the results of a referencing/credit check with me. Agents tend to accept credit/ref check results without question, you however are likely to employ a greater level of due diligence. You may need to join ICO before they release the info. You should be the one giving a final blessing. I would consider a different agent. I know various people go on about Lettingsupermarket.com on this website but I use them and I get all the referencing and credit check material. They don't proceed until I give the OK!

Neil's contract is with the letting agent, not the referencing company. Even if the letting agent isn't in the wrong, he must take action against them and they in turn must sue the referencing company (whom they had a contract with).

As Neil's complaint with the redress scheme has concluded, he would be advised to go to Trading Standards as a next step before taking his own legal action.

Neil,
I hope details this case assists you. Ms Hale won her case against Blue Sky Property (BSP) for supplying unsuitable tenants, even after they were accepted by LetRisks. Mr Paul Routledge CEO of Tenant Referencing UK appeared for the landlord as professional witness of referencing standards.
The landlord claimed breach of contract under The Sale of Goods and Services Act 1982.

Reply to the comment left by "Mandy Thomson" at "17/05/2017 - 13:23":

Mandy, you stole my thunder. Absolutely correct, the only contract is that between Neil and the letting agent, everything else is hot air.

REFRENCES are not worth the paper there written on unless you follow up and ask to see the tenants last 3 bank statements, both if joint tenants, passports, driving licenses or other photo ID. Check spelling of all names on all documents as the name may be spelt one letter different. I.e. Micheal or michael, notice the E & the A have been switched around, very easy to miss at a gkace. Make sure there bank statements show there income from there alleged source, ring Human Resources if necessary. Check previous addresses , on electrol role, Enquire why the move from north to south ect. Question everything. Reference agencies just record the information in front of them and want the sale. It's up to you to do the due diligence. Check for normal direct debits and standing orders as well as day to day spending. I.e. Pay monthly Mobile DD , gas and utilities DD , council tax DD and standing orders, plus supermarket spending Asda, Nandos , Pizza Hut, recognisable shops like house of Fraser , primark, new look extra. The more normal the better. Lastly buy a rent guarantee policy, remember you don't know these people from Adam. A reference agent once recorded an account number that was suspended. They do not check if the.account is active., your only know if you see the statements for yourself ...it's a mine field. Stay one step ahead of the professional non paying tenants. Finally once in 2 months arrears , which is effective 1 month as the second month is in approximately 4 weeks issue a section 21 and section 8 immediately and fill in your rent guarantee claims form in. You owe these people nothing. Of course ask them to pay up and send a late payment letter and knock on there door once. Then no more personal conversations or contact, let the law handle it. There's really is no need to be owed £12000. When your rents covered , you have there deposit, which the judge will award you, and there be gone in 6 months max....with as little financial loss as possible. Don't be emotional or fall for I'll pay next week

Reply to the comment left by "Paul Green" at "17/05/2017 - 17:29":

Brilliant post, Paul, thanks for all the tips. Just one thing - since the Deregulation Act the earliest you can issue a section 21 notice is 4 months into the tenancy and you only have 6 months from date of notice in which to enforce it in court.

Also, anyone planning to issue s.21 needs to serve the 3 new documents prescribed under the Deregulation Act (How to Rent, Gas Safety Certificate and EPC http://www.landlordlawblog.co.uk/2015/09/22/section-21-the-new-rules-the-prescribed-information-booklet-how-to-rent/ ). Note that Shelter advises tenants to use service of these in digital format as a defence to s.21 if the tenant hasn't previously given written permission for electronic service of notices.