Can a tenant under debt review be denied a rental home?
I need advice. A friend is under debt review and no rental agents will rent to her. Isn’t this unconstitutional? She pays rent on time and needs a place to stay. Also what percentage interest should a deposit accrue? Lease agreements make no mention of interest. – Arlinda
Hi Arlinda, landlords and estate agents perform comprehensive background checks on their tenants which includes a history of all their other credit agreements, judgements, defaults and whether or not an individual is under debt review.
There are no legal requirements that exclude an individual who is undergoing debt counselling under debt review from being party to a lease agreement.
The first thing to be aware of is that if the person pays on time and in full it will positively influence their credit score on TPN – the credit bureau that stores rental payment profile information. It is important that someone who wishes to improve their chance of securing a rental property in their own name makes sure that their agent or landlord is uploading their positive payment profile information to the credit bureau.
Besides that, there are a few things that your friend can do herself to secure a rental home; the key is to go the extra mile to ensure that her rental application is successful:
- Approach a potential landlord or agent with a double deposit in hand.
- Make the offer for someone to stand surety for her or she could co-sign the agreement with a friend or family member who have a good credit history.
- Submit her bank statements to improve her application.
- Ask her debt counsellor to submit her budget as proof of affordability.
Percentage of interest earned on a tenant’s deposit?
If the deposit is held by the landlord, it must be held in an interest-bearing account with the minimum rate of interest applicable to a savings account.
If the deposit is held by the estate agent, the deposit must be held in a trust account. The interest earned on the trust account is payable to the Estate Agency Affairs Board unless the lease agreement provides that the interest is paid to the tenant.
In TPN’s experience disputes can easily arise unless the lease agreement notes who it is that will hold the deposit and what interest will accrue. It is advisable to always include this provision in the agreement.
Got a burning question? Email firstname.lastname@example.org and we’ll be sure to assist you
Answered by Michelle Dickens, MD of credit bureau, TPN