As the year 2014 begins to fade into its final weeks and days, moments of reflection arise. In particular, tenant screening; the why and the what.
Tenant screening, also known as tenant checks, is the process of vetting potential tenants for residential rental properties. These properties can be single unit dwellings or a unit within a larger, more complex residential community.
BusinessDictionary.com defines a residential rental property as:
… a property from which the owner receives payment from the occupant(s), known as tenants, in return for occupying or using the property. Rental properties may be either residential or commercial. The owner of rental property may be allowed to take certain tax deductions such as mortgage interest and depreciation. (1)
Landlords and property managers are charged with the vetting process of a new tenant and, commonly, tenant screening plays a central role in this process. The primary purpose of tenant screening is to protect the financial investment of the owner and protecting existing tenants.
Adam Almeida, President and CEO of TenantScreeningUSA.com states: “Conducting a tenant check is the single most important activity a landlord or property manager can engage. Information gathered from a tenant check can provide the data a landlord or property manager requires in making a decision about a perspective tenant.”
Tenant background checks draw upon public records also known as consumer reports.
Typical reports used are:
1. Credit reports – used for determining financial solvency
2. Evictions – used to determine reliability and responsibility in a rental relationship
3. Sex Offender – used to determine potential safety for existing tenants
4. Criminal history – used to determine potential safety of existing tenants
The Federal Trade Commission is tasked with ensuring the legal and lawful use of consumer reports:
From the FTC (www.business.ftc.gov)
If you’re a landlord, you may use consumer reports to evaluate rental applications – as long as you follow the provisions of the Fair Credit Reporting Act (FCRA). The FCRA is designed to protect the privacy of consumer report information and to guarantee that the information supplied by consumer reporting agencies (CRAs) is as accurate as possible. The FCRA requires landlords who deny a lease based on information in the applicant’s consumer report to provide the applicant with an “adverse action notice.” (2)
Almeida states: “It is important to note that the use of consumer reports is a complicated task and one that should be fulfilled by third-party tenant screening companies, those that can ensure compliancy for landlords and property managers.”
Third-party tenant screening companies can be a significant benefit to the landlord and property manager. Governed by the Fair Credit Reporting Act or FCRA, third-party screeners must maintain current knowledge of all laws and requirements governing tenant screening.
In review:
Why – To protect financial investment and existing tenants
What – Tenant checks are the gathering of public information, or consumer reports
Who – Third-party tenant screening companies trained in the lawful and legal use and distribution of consumer reports specific to tenant checks
TenantScreeningUSA.com is a third-party tenant screening company with highly trained and skilled operators working within the rules and regulations of tenant screening as defined by the FCRA. With the ability to access information from databases and county courthouses, TenantScreeningUSA.com can provide the information required for landlords and tenants of properties large and small.
Notes:
(1) http://www.businessdictionary.com/definition/rental-property.html#ixzz3Ktd5ALOL
(2) http://www.business.ftc.gov/documents/bus49-using-consumer-reports-what-landlords-need-know
