Selecting the Right Tenant
How do Real Estate Agents select the right tenants? How do Agents “check-up” on potential tenants and protect the landlord interest from applicant fraud?
Whilst there is importance in using the normal reference check, it is not fool proof for one main reason – no potential tenant with any sense will elect a referee that will provide a bad reference! Many agents have also started thinking outside of the box and conducting Google and Facebook searches to check the character of a prospective tenant. Should Real Estate Agents look into the personal lives of an applicant? What can an Agent find that would indicate that they would not be a good tenant?
Agents conduct a tenancy database search. There are many providers that agents can choose from. Most agents use the: National Tenancy Database; TRA – Trading reference Australia
A tenant’s details should be listed on a database providing the agent has met the legislative requirements as per the Residential Tenancies Act (2010), and those details can be listed for up to three years or until they become out of date, ie the database cannot say the tenant owes money to the landlord if the tenant has subsequently paid the money outstanding. The database entry must be changed to state that the money has been paid.
The one major downside to the database checking system is that not all agents use the database for “Blacklisting” tenants, and those that do, have the choice of a number of databases. Furthermore, these databases are not all linked with each other because they are all run by private companies. Essentially, you could be looking up a potential tenant on one database, find that they are not listed on that search but they could be found on another database. It could potentially cost a Real Estate Agent a lot of money to subscribe to every database to check the suitability of one tenant.
A free way to check if a potential tenant has had previous rental defaults is to conduct a search of the NSW Civil and Administrative Tribunal (NCAT) website. This can provide you with Tribunal transcripts of any tenant dispute that has been reported before the Tribunal (or its predecessor, the CTTT). To conduct a search you should follow the steps below:
1. Go to www.ncat.nsw.gov.au
2. Select NCAT decisions on the top directory bar
3. Select “Consumer and Commercial Division”
4. In the search bar enter the applicants full name and select search
5. Once the search results appear you may have to narrow the search to only matters within the NCAT system so de-select all Courts and de-select all Tribunals except for the Civil and Administrative Tribunal (Consumer and Commercial Division)
You will only receive results that have been heard before the Tribunal. Matters that were resolved through conciliation will not appear. Real Estate Agents must always try to minimise the tenant default risk by adopting the mantra of “protecting the landlords” as the number one priority.