The question of background checks and tenant screening are common inquiries from both owners and potential renters alike. Everyone wants to feel assured that they are making the best possible choice, whether in the form of new tenants or a new rental property. In this post, we will briefly navigate the confusing path that leads from first application to final lease signing, specifically highlighting the tenant screening process. While directed primarily at owners and landlords, the information contained here is an excellent resource for potential renters as well.
First and foremost, there are a variety of options for screening a potential tenant. Whether it be an online tenant screening website, through your property management company, and good old fashioned checking of references. The ultimate aim of screening, however, is to determine if the renter will be responsible for the reasonable upkeep property and conduct their lease obligations in a timely and professional manner. This includes, but is not limited to, paying rent on time, keeping the property relatively undamaged, and overall treating the rental property with common sense respect.
The typical screening process generally includes an application, background check, and credit check. And typically there is an application fee required to apply for rental prooperty. The fee covers the cost for the screening company to pull reports, background checks, conduct reference checks, and adminstrative tasks involved with compiling all of the information for the Landlord. It is importand for landlords to know what they are getting from the screening company. For example the term “backgorund screening” or “backgound check” could include a criminal check or it may simply include a credit check and rental history verificatio. It’s important for landlords to clarify this distinction with your screening company to be sure you understand what reports they will be running for you. From there, the owner is able to make an informed decision.
There are several components that make up a solid screening process for prospective tenants. These components include, but are not limited to, the following:the basic personal information on all occupants including pets and number of occupants, employment history and current employment information including income, financial information such as pay stubs and bank accounts, rental history or mortgage payment history, and references from prior Landlords if applicable.
To decide on the right renter, landlords also have a right to conduct a criminal background check and an eviction check- as long as this is made clear on the rental application that the prospective renter signs providing their authorization to do so. This check will show criminal records, evictions, and assorted public records. With this information, the owner can better determine the tenant’s suitability for the rental property and evaluate the risks involved.
In each step of the screening process, there may be warning flags and details that should be carefully reviewed by the owner. For example, in the credit history, the owner should take note of any bankruptcies, judgements, history of late payments, and current debt level. It is important to keep in mind, however, that financial issues should be considered on a case-by-case basis and any existence of these items are not necessarily a mark of a bad tenant although checking into it is encouraged. There may be cases where a prospective renter had run into difficult financial times but is now “back on their feet” so it is important to understand the entire picture. On a similar thread, contacting the potential tenant’s current employer can help establish the overall financial picture.
Another important issue to consider is a record of rental evictions. While this can and should raise a warning flag, this is another instance where learning the backstory will better inform the ultimate decision. In addition, the owner or tenant should consider calling former landlords of the prospective renters. Beyond learning about their timeliness of payments, this is an opportunity to get to know the tenant’s a bit more- which may also contribute to screening process.
Lastly, and no less importantly, the owner may consider conducting an informal interview or meet-and-greet with the prospective renter. This is best done as the last step if all other elements have been deemed satisfactory. In this conversation, you can get a better feel for the tenant’s potential suitability for your rental property.
Whatever path you decide to pursue for screening potential tenants, Landlords must strictly follow the the Federal Fair Housing Act. These are clear guidelines for preventing discrimination in housing situations and provide an equal housing opportunity in accordance with fair housing laws. Talk to your tenant screening provider to learn more about this topic and get the latest information from them each time you have a need for screening the next renter as there may be new laws and guidelines that have taken affect since the last time you went through the process. Do your homework, trust your instinct, and choose wisely- you’ll be glad you did.