Chestertons urges stronger tenancy checks to prevent rental fraud

Chestertons urges stronger tenancy checks to prevent rental fraud

Chestertons is calling for enhanced tenant referencing and ongoing checks to combat fraud in the private rented sector, following a BBC Panorama investigation into fake identities and forged documents used to secure tenancies.

Chestertons, a major UK letting agency, has highlighted the risks landlords face from fraudulent tenants and is advocating for more rigorous and continuous verification processes. Its approach includes bespoke referencing criteria and twice-yearly property inspections to protect landlords from financial loss and property damage.

The agency’s Head of Residential, Adam Jennings, emphasises that relying solely on initial checks or document scans is insufficient. Instead, real-time account verification through open banking and ongoing tenant engagement are vital to detect fraud early and maintain property standards.

Chestertons’ approach to tenancy fraud prevention

Chestertons employs a specialist referencing supplier that combines technology, data analytics, and expert case handling to provide landlords with robust protection against fraudulent tenancy applications. This goes beyond standard referencing by scrutinising evidence thoroughly rather than relying on automated algorithms.

Adam Jennings explains that fake bank statements are common in fraudulent applications, but Chestertons counters this by using open banking technology to verify genuine bank accounts in real time. This method offers a higher level of assurance than accepting static PDF documents, which can be easily fabricated.

Furthermore, Chestertons’ property management service includes inspections twice a year and maintains ongoing contact with tenants. This continuous oversight helps identify issues that may arise during the tenancy, such as unauthorised occupants or property misuse, which initial move-in checks would not detect.

The agency stresses that good property management requires attention to detail throughout the tenancy to protect landlords’ investments and ensure compliance with legal obligations.

Context of tenancy fraud and landlord risks

The BBC Panorama programme that prompted Chestertons’ call exposed how fraudsters use fake IDs, forged references, and falsified bank statements to gain access to rental properties. Such fraud can leave landlords facing serious consequences, including unpaid rent, property damage, and costly legal battles to regain possession.

One case featured involved a landlord whose tenant ceased paying rent and operated a brothel from the property, resulting in four and a half months of lost income and a £4,500 repair bill before the property could be re-let. This example illustrates the financial and reputational risks landlords face when fraud goes undetected.

These risks are heightened by the current economic pressures and housing shortage, which can incentivise fraudsters to exploit vulnerabilities in tenant referencing and property management processes.

Practical implications for landlords and letting agents

For landlords managing small portfolios or individual properties, the message is clear: initial tenant checks are necessary but not sufficient to prevent fraud. Ongoing verification and regular property inspections are critical to detect changes in tenancy circumstances and maintain property condition.

Letting agents should consider adopting more sophisticated referencing tools that include open banking verification and expert review of documents rather than relying solely on automated checks. This may require investment in specialist suppliers or technology but can reduce the risk of costly fraud and legal challenges.

Regular inspections, ideally twice yearly as Chestertons recommends, provide an opportunity to verify tenant identity, check for unauthorised occupants, and identify maintenance or compliance issues early. This proactive approach supports landlords in fulfilling their legal obligations and protecting their assets.

Uncertainties and future developments

While Chestertons’ approach demonstrates best practice, there is no statutory requirement for ongoing tenancy checks or biannual inspections in the current regulatory framework. This leaves room for variation in standards across the sector and potential gaps in fraud prevention.

Government policy on tenancy fraud and letting agent regulation may evolve to address these issues, especially as digital verification technologies become more widespread. Landlords and agents should monitor regulatory developments and official guidance to ensure compliance and mitigate risks.

Additionally, the balance between tenant privacy and fraud prevention remains a sensitive issue. The use of open banking and real-time data checks requires careful handling to comply with data protection laws and maintain tenant trust.

Steps landlords should consider now

• Review current tenant referencing procedures to include more robust verification methods, such as open banking checks where available.
• Implement or increase the frequency of property inspections to detect tenancy changes and property misuse early.
• Maintain detailed records of tenant communications, inspections, and any concerns raised to support potential legal action if fraud is discovered.
• Engage with letting agents or specialist suppliers that offer expert case handling and technology-driven fraud detection services.
• Stay informed about sector regulatory changes and best practice guidance related to tenancy fraud and property management.

Supporting landlords with tenancy compliance and fraud prevention

The Landlord Association (TLA) provides members with access to compliance resources and practical guidance tailored to tenancy management and fraud prevention. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, aims to help landlords and letting agents organise tenancy documentation, record inspections and communications, and monitor compliance activity in one place.

ORBIT’s developing features include tools to track property inspections and tenant interactions, which can support early detection of tenancy issues and evidence retention for dispute resolution. Membership also offers access to expert advice and updates on regulatory developments affecting tenancy checks and fraud prevention.

Exploring TLA membership and ORBIT BETA access can assist landlords and agents in strengthening their tenancy management processes and reducing exposure to fraud risks.

Looking ahead, as tenancy fraud remains a significant challenge, landlords and agents who adopt continuous verification and proactive property oversight will be better positioned to protect their investments and comply with evolving sector standards.

Sources: Letting Agent Today