Landlords should ask potential tenants to complete a pre-tenancy application form. This form includes important information that helps them choose a tenant.
Pre-tenancy application form
This form tells you important details about a potential tenant:
- their name and contact details
- where they’re living now and their renting history
- ID details
- references you can contact to find out more about them.
This application form also gives you permission to do a credit check.
A credit check report will usually give you the following information about a potential tenant:
- their full name and date of birth
- any known aliases
- information about their occupation and employer
- their involvement in payment defaults, collection actions, court judgements, bankruptcies or other public notices information
- other recent addresses
- cross-references to other credit enquiries made against them
- their credit rating.
Choosing a credit check agency
You’ll need to subscribe to a credit checking agency to check a tenant’s credit report. The cost varies, so check with each agency to see what their costs are and what services they include. If you’re a member of a local property investors association, you may receive a discount.
You may consider the cost of subscription too high if you’re only doing a few credit checks each year. Instead, you could ask the potential tenant to request a copy of their own credit report.
Requesting a credit check
You can usually get credit checks through the agency’s website, or from the agency’s call centre service. You may need a credit card.
Make sure you have a copy of the pre-tenancy application form to hand. Credit checking agencies need to be sure you have the tenant’s permission.
After you log in to the agency’s website, enter the details of the potential tenant. A few minutes later you should receive the credit report. Some agencies will fax or mail you a report.
Using the credit report
Credit reports give you information to support your personal judgement of a potential tenant.
If you enter into a tenancy agreement after receiving a credit report, make sure you keep a copy of the report. The tenant has the right to ask to see it.
Most people will have some data recorded against their name in a credit report. If a report has little or no data, it could be because they’re very new to the country or they have other identities that haven’t yet been tracked.
Your obligations when collecting personal information
As a landlord, you collect personal information about tenants. This can be on the pre-tenancy application form or the residential tenancy agreement. It’s important to know your obligations under the Privacy Act 1993:
- you must have a lawful purpose for collecting the information that’s relevant to the tenancy
- you must let the tenant know why you’re collecting the information, what it’ll be used for and who it’ll be shared with
- you can’t use the information for anything other than what you said it’ll be used for
- you can’t share it with anyone else unless the tenant says you can
- you must store the information securely so no one else can access it
- the tenant has the right to access the information and to correct it.
You can’t discriminate against potential tenants
You can’t decide who to rent to or whether to continue a tenancy, if your reasons breach the Human Rights Act. If you do this, you could be taken to the Tenancy Tribunal or the Human Rights Commission.