Tenant screening a process of evaluating background information on potential tenants has many parts to it and should be conducted by landlords and property managers in conjunction with a professional background screening company. With new laws becoming active this year it is important for landlords to understand what these laws mean to them and how they affect the tenant selection process. A well-qualified tenant screening company can help apartment managers and owners create and maintain compliant tenant screening policies and can provide the background reports necessary in fully vetting rental property applicants.
There are certain key background reports that are essential to any tenant screening platform. These reports are consumer credit reports with credit score, eviction history and criminal history including sex offender records. A landlord can gain access to any public record. A public record is created anytime a person interacts with a public agency like law enforcement. The criminal justice system is one such source where public records are created as is the department of motor vehicles. Other records that may be of interest include: civil records, nationwide criminal checks, liens and judgments, reference checks and verifications. A best practice for a landlord would be to let a potential renter know exactly what information is being requested before conducting the background checks. A landlord must get permission from an applicant before running certain tenant checks like pulling a person’s credit history as this is required and enforced by the FCRA (Fair Credit Reporting Act).
Here is a description of each of the top 3 Tenant Background Checks:
A Consumer Credit report – This report is provided by a credit bureau and contains information on an applicant’s credit worthiness or ability to pay. A credit report contains information on loans and credit arrangements, including contracts and revolving credit plans. It will also contain critical payment information as well as action taken by issuers of credit. Consumer credit reports can only be created after an applicant provides explicit written permission and has been informed of individual rights regarding the ability to correct any information and acquire a copy of the report used during the tenant background check.
Evictions – This report provides information on a potential tenant’s rental history. Just as the name suggests eviction reports shows any history of eviction from previous landlords or property managers.
Criminal History/Sex Offender Registry – Criminal background checks will provide any recordable interaction with the justice system, primary the police or sheriff departments. This may include minor misdemeanors or major felonies. It should be noted that recent actions by the Department of Housing and Urban Development may restrict the use of criminal history in certain situations in regards to the tenant screening process.
Some think that owners of a small apartment building or single family dwelling don’t need to use a tenant screening company. However, regardless of property size a landlord or property manager should use a third-party tenant screening company. A well-qualified tenant screening company maintains compliance and understanding of all rules, regulations, and laws governing the use of public records. Further, a tenant screening company will have the security and systems in place that can maintain, control and store all the sensitive information used during the tenant screening process.
To learn more about tenant screening, the reports involved and why it is a good idea to work with a professional tenant screening company to help stay compliant and how new laws enacted this year could require tenant selection polices be revised and updated read recent TenantScreeningUSA.com press release: Tenant Screening 101 – A Review