UK Landlord Forum / Life

I've got two potential tenants for my flat as the current tenants are moving out in a few weeks.  One of them has been quite open with me about some issues with credit cards a few years back.  They've advised they can provide a guarantor but the other tenant has also offered to be solely responsible for the rent.  I've spoken to the referencing & insurance company (letsure) who have advised that would be absolutely fine and that the second tenant can be listed on the contract as a 'Permitted Tenant'.

Has anyone any experience of this?  Will my mortgage company have anything to say? 

I think my main concern is they're a couple moving in together for the first time, what if the rent payer moves out & leaves the 'permitted tenant' behind - how am I covered from an insurance perspective? 

Could anyone advise if they think this is a good idea?

Have you had a credit check done on them?  What results did it reveal?

I would insist on having a guarantor myself regardless of anything else (guarantor also to be credit checked before acceptance).  I would also want both tenants named on the tenancy agreement.

You sound as if you have some doubts about these two, I am guessing because one of them has admitted to a less than ideal credit history (possible CCJs there?).  They presumably realise this will come out on a credit check.  It may be some years ago, and he/she may well have learned a sharp lesson, but alarm bells always ring for me as a landlady in such circumstances - just in case he/she hasn't.  As you say you still have a few weeks, is it worth continuing with these two, or would it be better to keep the property on the market a bit longer and see if a better option turns up?  You have met them and tried to gain a feel for them, so only you can really decide.  If your gut instinct is "no" then steer clear.

From a purely personal point of view, I do actually have a tenant in one of my own properties who also has a difficult credit history.  The arrangement was though, that her rent would be paid by housing benefit directly to me, whilst her parents (who had clear credit history) stood as guarantors.  So far, a year on, and it has been fine, but I take each case on its merits as it crops up.
 
Not sure what you mean when you ask whether your mortgage lender would have anything to say.  My mortgage lenders are aware that my tenanted properties are buy-to-let, but I don't inform them of every change of tenancy.

Hiya, thanks for the reply.  The tenants themselves seem very decent and down to earth and want to live there long term so seemed ideal.  I also appreciated the fact they were upfront with me about the credit history. 

My mortgage company, because I don't have a formal buy-to-let mortgage (I'm only renting it out as I can't sell) are really strict about agreements.  They say it has to be a 6 mth agreement & have quite a few other stipulations.  The reason I was considering having a 'permitted tenant' is that the insurance company who would insure the rent & legal expenses will only insure people without CCJs but suggested to me to have the tenant with CCJs as a 'permitted tenant' and the one with a good credit history as contractually liable for all of the rent. 

Thanks for the advice though, you've given me some food for thought.

Hello Landlady,

I'm a little bit more relaxed than Topsyet.  One of them is being completely honest with you.  The other is offering you options (which will be sensible to them - they might not know about all the behind the scenes stuff you've got to check out) to make it easy for you to say Yes.

If you analyse that they are in a position where they can pay the rent now and a credit check shows no re-lapse into bad habbits, then I'd try to take them on.  After all, if they've cleared up their debts, and leared their lessons then you take no more risk (and maybe less?) than someone with a clean record who suddenly gets into trouble.

As they're trialing living together for the first time (and doing it by renting together rather than buying - really sensible) then you're well advised to do a joint tenancy in case things fall apart and one of them moves out.  They both need to be contractually liable for the whole of the rent.  How you arrange any behind the scenes insurance should not change that.

Hope this helps.

If your feeling from meeting them is that they are decent and lessons from the past appear to have been learned then that may be OK.  It is your call. 

I agree with Jeremy that it would be a good idea to make them both jointly liable for the rent.  I would also ask for a guarantor as an extra layer of security, but that is the way I usually like to do things.   

As I said, I have one tenant in one of my properties with a less than perfect credit history.  She is a nice, decent lady who has been left on her own to bring up a child.  We met her and got good "vibes" if you like to call it that, her housing benefit pays the whole rent directly to us, and her parents stood as guarantors in case it was late coming through at first (it wasn't, fortunately).  Each case on its own merits, I think.  None of us is perfect, after all.