Tenant screening is a critical part of vetting housing applicants and part of a best practice is to ensure properties are safe for other tenants as well as the owners of the property. A thorough tenant screen provides risk mitigation and can:
- Create a safe environment for other tenants, potentially securing long-term renters that provide financial security for ownership.
- Assist in creating a safer environment for the neighborhood at large, as well as creating name recognition as a safe property, thereby attracting other perspective tenants.
- Create a secure financial environment with verification to the ability to pay a lease or rent.
- Potentially secure a property against potential damage to the property or damage to financial standing due to a possible legal action.
A typical background check for perspective tenants can include a variety of public records and reports. Upon receiving the appropriate documents that legally allow a landlord or property manager to conduct a tenant check, typical reports and/or documents may include:
- Consumer Credit report. Verification income and ability to fulfill the financial obligation of a rental agreement.
- Eviction Records. Discover any potential challenges with a problematic tenant.
- Social Security Number Records Check. Verify recent counties of residence as well as notify a researcher which counties should be checked for Criminal History Records.
- County Criminal Records check. Review any criminal history reporting, as available and lawfully obtainable.
There are a number of “things” a landlord and/or property manager need understand as related to a tenant check.
From JD Supra’s website on November 25, 2020, as related to changes in law:
The past several years have seen an uptick in state and local background screening ordinances imposing stricter requirements on landlords, both in terms of paperwork and in terms of what facts may be reported… It also strictly construes what constitutes an adverse action triggering the applicant notice requirement; even a denial of an application or an increase in rent might qualify. Additionally, it prohibits background screeners from reporting unlawful detainer actions where the consumer prevailed. (1)
Adam Almeida, President and CEO of TenantScreeningUSA.com states: “Laws governing the fair and lawful use of public records as a part of the tenant vetting process have become increasingly restrictive and, much like Ban-the-Box laws governing pre-employment background screening, can vary greatly from jurisdiction to jurisdiction.”
Also, from JD Supra (Nov. 25, 2020):
Landlords and property owners may be subject to criminal as well as civil liability under new ordinances.
At least one city has established criminal penalties as well as civil causes of action for reporting violations. Oakland’s ordinance authorizes criminal charges to be brought against violators, in addition to a $1,000 fine per violation or individual civil actions for damages. Other localities may follow Oakland’s example. Such penalties dramatically raise the stakes for noncompliance, especially where the lines on what is and is not reportable are unclear. (2)
Almeida concludes: “The most important “thing” to know about tenant screening is that a best practice remains to work with a well-qualified third-party tenant screening agency, such as TenantScreeningUSA.com, in order to remain fully compliant with law.”
TenantScreeningUSA.com provides full-service tenant screening for landlords and property managers of any size and can greatly assist in remaining fully compliant with all existing law governing tenant screening. With a highly trained and experienced staff, TenantScreeningUSA.com can provide help to landlords and property managers with all their tenant screening needs.
Notes:
(1) jdsupra.com/legalnews/five-things-you-should-know-about-81451/
(2) ibid
