Renters' Rights Act 2025 — in force 1 May 2026 · England only. Right to rent checks remain mandatory. Tenant Fees Act 2019 prohibits charging tenants for referencing. Full landlord obligations guide →
Tenant Referencing:
Complete Landlord Guide
Thorough tenant referencing is your first line of defence against rent arrears and property damage. We explain every check you should carry out — including the mandatory right to rent check — and what to do if a tenant fails referencing.
What Is Tenant Referencing?
Tenant referencing is the process of checking a prospective tenant's background, financial situation and rental history before granting a tenancy. It helps landlords assess whether a tenant is likely to pay rent on time, look after the property and comply with the tenancy agreement.
While most referencing checks are not legally required, the right to rent check is mandatory for landlords in England. Failure to carry out right to rent checks can result in civil penalties of up to £20,000 per occupier — or unlimited fines for repeat offences.
Under the Tenant Fees Act 2019, landlords and letting agents cannot charge tenants for referencing. The cost must be borne by the landlord or included in the letting agent's fee.
The Tenant Referencing Process
Identity Verification
Verify the prospective tenant's identity using original documents — passport, driving licence or national identity card. This also forms part of the right to rent check.
Right to Rent Check
Mandatory in England. Check that all adult occupiers have the right to rent in the UK. Use original documents or the Home Office online checking service.
Credit Check
Run a credit check through a referencing agency to identify CCJs, bankruptcy, IVAs, missed payments and overall credit score.
Employment & Income Reference
Verify employment status and income. The general rule is rent should not exceed 30–35% of gross monthly income. For self-employed tenants, request 2–3 years of accounts.
Previous Landlord Reference
Contact the previous landlord to confirm rental history, conduct, whether rent was paid on time and whether the property was left in good condition.
Affordability Assessment
Assess overall affordability. If the tenant does not meet income requirements, consider a guarantor or ask for additional references.
Referencing Checks at a Glance
| Check | Required? | Notes |
|---|---|---|
| Credit check (CCJs, bankruptcy, IVAs) | Mandatory | Via referencing agency — cannot charge tenant |
| Right to rent check | Mandatory | Mandatory in England — civil penalty if missed |
| Identity verification | Mandatory | Part of right to rent process |
| Employment reference | Recommended | Strongly recommended — verify income |
| Previous landlord reference | Recommended | Strongly recommended — check rental history |
| Affordability check (30–35% rule) | Recommended | Best practice — reduces arrears risk |
| Guarantor agreement | Recommended | Use where tenant fails income threshold |
| Bank statements (3 months) | Recommended | Useful for self-employed or variable income |
What to Do If a Tenant Fails Referencing
If a prospective tenant fails one or more referencing checks, you have several options. The right approach depends on why they failed and the nature of the failure.
Require a Guarantor
A guarantor agrees to pay rent if the tenant defaults. The guarantor agreement must be in writing and signed as a deed to be enforceable.
Decline the Application
You are entitled to decline any application. You do not have to give reasons, but you must not discriminate on protected characteristics.
Request Bank Statements
For self-employed tenants or those with variable income, 3–6 months of bank statements can supplement a weak employment reference.
Review Rent in Advance
You can request up to 1 month's rent in advance as a permitted payment under the Tenant Fees Act 2019. You cannot request more.
Right to Rent Checks — The Legal Requirement
Right to rent checks are mandatory for all landlords in England under the Immigration Act 2014. Before granting a tenancy, you must check that all adult occupiers aged 18 or over have the right to rent in the UK.
Who to check
All adult occupiers aged 18 or over — not just the named tenant. This includes lodgers and sub-tenants.
When to check
Before the tenancy begins. For time-limited right to rent, repeat checks must be carried out before the expiry date.
How to check
Check original documents (passport, biometric residence permit) or use the Home Office online checking service for those with a share code.
Penalties for non-compliance
Civil penalty of up to £20,000 per occupier for a first offence. Unlimited fines for repeat offences. Criminal liability in serious cases.
Guarantor Agreements
A guarantor agreement is a legally binding contract under which a third party (the guarantor) agrees to pay the rent and meet the tenant's obligations if the tenant defaults. To be enforceable, a guarantor agreement must be:
- In writing
- Signed as a deed (witnessed signature)
- Clearly set out the obligations being guaranteed
- Specify whether the guarantee is limited or unlimited in amount
- State whether the guarantee continues if the tenancy is renewed or varied
We draft guarantor agreements for landlords that are properly executed as deeds and enforceable in the event of default. A poorly drafted guarantor agreement may be unenforceable when you need it most.
Frequently Asked Questions
What does tenant referencing involve?
Tenant referencing typically involves a credit check (checking for CCJs, bankruptcy, IVAs and credit history), an employment reference (confirming income and employment status), a previous landlord reference (checking rental history and conduct), identity verification, and a right to rent check. Some landlords also check affordability — the general rule is that rent should not exceed 30–35% of the tenant's gross monthly income.
Is tenant referencing a legal requirement?
Tenant referencing itself is not a legal requirement, but right to rent checks are mandatory for landlords in England. Right to rent checks require landlords to verify that all adult occupiers have the right to rent in the UK before granting a tenancy. Failure to carry out right to rent checks can result in civil penalties of up to £20,000 per occupier. Thorough referencing also protects landlords from rent arrears and property damage.
What can I do if a tenant fails referencing?
If a tenant fails referencing, you can decline to let to them, ask for a guarantor (someone who agrees to pay rent if the tenant defaults), ask for a larger deposit (subject to the deposit cap rules under the Tenant Fees Act 2019), or ask for rent in advance (also subject to Tenant Fees Act restrictions — only 1 month's rent in advance is permitted as a permitted payment). You cannot charge the tenant for the referencing check.
Can I charge tenants for referencing?
No. Under the Tenant Fees Act 2019, landlords and letting agents in England cannot charge tenants for referencing checks. Referencing fees are a prohibited payment. Landlords must absorb the cost of referencing themselves or use a letting agent who includes referencing in their fee. Charging a tenant for referencing is a criminal offence and can result in a fine of up to £5,000.
What is a guarantor and when should I use one?
A guarantor is a third party (usually a parent or close relative) who agrees to pay the rent and meet the tenant's obligations if the tenant defaults. Guarantors are commonly used where a tenant has a poor credit history, is a student, is self-employed with variable income, or is new to renting. The guarantor agreement should be in writing and signed as a deed. We advise on drafting guarantor agreements that are legally enforceable.
What is the right to rent check?
Right to rent checks are a legal requirement in England. Before granting a tenancy, landlords must check that all adult occupiers aged 18 or over have the right to rent in the UK. This involves checking original documents (such as a passport, biometric residence permit or share code) or using the Home Office online checking service. Checks must be carried out before the tenancy begins and repeated for tenants with time-limited right to rent.
Speak to a Landlord Solicitor
Questions about tenant referencing, right to rent or guarantor agreements? Call us for a free initial discussion.
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Tenant Fees Act Warning
You cannot charge tenants for referencing checks. Doing so is a prohibited payment under the Tenant Fees Act 2019 and can result in a fine of up to £5,000.
Speak to a Landlord Solicitor
Questions about tenant referencing, right to rent or guarantor agreements? We offer a free initial discussion.
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