Landlords in Portugal are now able to carry out background checks on tenants as a new system has just been launched which is been fully endorsed by the National Data Protection Committee. The aim of the system is to stimulate confidence within the rental market, as it should help reduce the risk of damage to the property or missed payments.
The background check service was launched at the beginning of the summer, and it’s hoped it will attract more investors and property owners to put homes into the rental market. There are two types of tenant checks available which are Expressed References and Complete References.
The first type of report detects possible problem areas using public information from Social Security and other related services. The second report carries information about the tenant’s employment status as well as any references from former landlords.
Apparently the service, Renda Protec doesn’t breach any privacy rights as the information is only given with the tenant’s permission. Such information is already commonplace in countries where the rental market is more fully developed. For example a survey a couple of years ago carried out in the UK found 98% of tenants who had received a positive reference reports went on to be problem free, while 83% of those who had defaulted on payments hadn’t undergone any professional background checks.
At the moment Portugal isn’t particularly popular amongst investors as it has a history of ineffectual eviction processes and is relatively high risk, something that it is seeking to change. Tenants are also able to purchase their own referral reports, enabling them to negotiate more effectively when choosing a new rental home.