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Commercial Tenant References UK: Landlord Guide

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Part ofUK Property Law Guide

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
Letting a commercial property to the wrong tenant can cost a landlord months of lost rent, legal fees, and the headache of recovering possession. That is why vetting sits at the heart of any sensible letting process, and references are the main tool landlords use to separate solid applicants from risky ones. For commercial lettings in England and Wales, there is no prescribed checklist set by statute, which means the responsibility falls squarely on the landlord (and their agent) to build a picture of the prospective tenant before committing to a lease that may run for years. This guide walks through the types of references commercial landlords typically gather, what each one tells you, how to request them properly, and where the common pitfalls sit. Whether you are letting a single retail unit or a portfolio of offices, the same underlying logic applies: check first, sign later.

What this document is

A tenant reference request is a formal enquiry made by a prospective landlord (or their agent) to a third party who can vouch for the applicant's reliability, financial standing, or character. In a commercial setting, references serve a different purpose from residential ones.

You are not just checking whether someone pays rent on time, you are often assessing a business entity whose trading performance, balance sheet, and management team will determine whether the rent gets paid for the next five, ten, or fifteen years. Commercial references typically combine hard financial data (bank statements, audited accounts, credit reports) with softer evidence of conduct (previous landlord feedback, trade references, director character references).

Unlike residential lettings, commercial landlords are not bound by the tenant fees legislation that restricts what can be charged, and they have broader freedom to set their own vetting criteria. The process usually runs alongside heads of terms negotiation and should be completed before the lease is engrossed and signed.

How to use this document

  1. Agree heads of terms and identify the proposed tenant entity. Before chasing references, confirm exactly who is taking the lease. Is it a limited company, an LLP, a sole trader, or a partnership? The answer shapes which references you need and whether a guarantor should sit behind the covenant. Get the full legal name, company number, and registered office.
  2. Request written consent and the reference pack. Ask the prospective tenant to provide written consent to approach referees, along with a completed reference form covering trading history, directors' details, bank account information, and previous landlord contacts. Without consent, banks and former landlords will not respond, and you risk data protection issues.
  3. Approach referees and run independent checks. Write to the tenant's bank, previous landlord, accountant, and trade referees using the consent provided. Alongside this, pull a company credit report, check filed accounts at Companies House, and search for any county court judgments. Cross-reference what the tenant told you against what the documents say.
  4. Assess the covenant strength and decide on security. Review everything together. If the tenant's financials look thin (a new company, weak trading history, modest net assets), consider asking for a rent deposit, a personal guarantee from the directors, or a parent company guarantee. The standard industry benchmark is that clear profits should comfortably exceed the annual rent.
  5. Document the decision and proceed to lease. Keep a written record of which references you relied on and why you accepted the tenant. If you imposed conditions (guarantor, rent deposit deed, authorised guarantee agreement on assignment), make sure these are reflected in the lease documentation before completion.

Common questions

If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £149.

Common questions

Q Can a commercial landlord refuse a tenant based on poor references?
Yes. Commercial landlords have wide discretion to choose who they let to, and there is no general obligation to accept a tenant whose references are weak. You should still avoid decisions that could amount to unlawful discrimination under the Equality Act 2010, but turning down an applicant because their accounts show losses or their previous landlord reports rent arrears is perfectly legitimate.
Q What is a bank reference and is it still useful?
A bank reference is a short statement from the tenant's bank confirming the account has been conducted satisfactorily and giving a general view on whether the applicant can meet the financial commitment. Banks have become cautious and often give only brief, heavily caveated responses. Many landlords now rely more heavily on credit reports and filed accounts, but a bank reference can still add useful corroboration.
Q Should I ask for a guarantor on a commercial lease?
It depends on the covenant strength of the tenant. For a newly incorporated company, a company with limited trading history, or a special purpose vehicle, a personal or parent company guarantee is common and often essential. For an established business with strong accounts, a guarantee may not be needed. The decision should be driven by the financial evidence in the reference pack.
Q How long does the reference process usually take?
Plan for two to four weeks. Banks and accountants can be slow to respond, and previous landlords may need chasing. Starting early, ideally as soon as heads of terms are agreed, prevents the reference process from holding up completion. If references come back unclear or contradictory, allow extra time to follow up before committing.
Q What if the tenant is a newly formed company with no trading history?
This is common, particularly with special purpose vehicles set up for a single site. In that scenario, references on the company itself will be limited, so focus on the people behind it: director character references, personal bank references, and personal guarantees. A rent deposit equal to several months' rent is also typical to compensate for the lack of trading track record.
Q Do I need references if the tenant is paying a large rent deposit?
A deposit helps but is rarely a complete substitute for references. Deposits cover short-term arrears, but a tenant who fails and vacates mid-term leaves you with empty premises, business rates liability, and reletting costs that a deposit will not cover. References help you judge whether the tenant is likely to last the term, not just whether they can pay the first quarter.
Q Can I charge the tenant for reference checks?
In commercial lettings, yes. The Tenant Fees Act 2019 restrictions apply to assured shorthold tenancies and similar residential arrangements, not commercial leases. It is common for landlords or agents to recover referencing costs, or to ask the tenant to pay directly for the reports. This should be agreed in the heads of terms to avoid disputes.
If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £149.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

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Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.