What is a fraudulent tenant?
A fraudulent tenant is someone who provides false information within their application to an agent to gain access to a property. Even the most reputable referencing agencies haven’t picked up on some of the more highly advanced fraudulent documents being submitted.
Agents should be aware of the increasing issue and put in place additional due diligence checks such as checking Companies House for businesses submitted on applications.
Private rented sector (PRS) demand
The increasing problem could be in part to the unprecedented demand currently on the PRS. Propertymark’s PRS Report for July recorded 101 prospective tenants per branch, a 15 per cent increase from their June figures and the highest number they have recorded. The report also highlighted a decrease in rental stock, leading to more pressure on the market and fierce competition between applicants.
PRS REPORT: The average number of new prospective tenants registered per branch increased to 102, which is a significant jump from June’s figure of 88.
Coupled with the increasing demand with continuous advances in technology, and the income and employment credentials of potential tenants being eradicated by the economic repercussions of COVID-19, some tenants could be taking the fraudulent route to gain access to a property above competitors.
Due to the seemingly legitimate nature of the documents, some tenants are successful in their application and ultimately use the property to either run illegal businesses, occupy and not pay rent, or sublet without the landlord’s consent.
Out of the several alarming case studies provided by Propertymark members, one shows how faked references can evade even a reputable, independent referencing company, resulting in fifteen months of arrears and a convoluted route to possession.
Agents are encouraged to share examples with Propertymark's Policy Team to raise awareness and to help us shape calls for future reforms and demonstrate the ways in which the issue is impacting the sector with Parliamentarians and Governments.