Finding Your Perfect Tenant

Tips on effectively finding and screening qualified tenants, while ensuring your process is efficient, thorough and legal to get the best tenants for your rental property. Finding Your Perfect Tenant Table of Contents

Table of Contents

What Does the Perfect Tenant Look Like? ...... 2 Do Tenants Lie on Rental Applications? ...... 4 How to Choose the Best Tenant Screening Company ...... 6 The Best Landlord Guide to Charging Rental Application Fees ...... 12 What Information is on a Tenant Background Check? ...... 15 Information Needed for a Tenant Background Check ...... 17 How to Do Landlord Verifications: The Right Way ...... 19 What is a Good Credit Score for a Tenant? ...... 21 Should Landlords Get a Background Check on a Tenant’s Spouse? ...... 23 Can Landlords Ask Tenants if They Are Married? It Depends! ...... 25 Tenant Won’t Give Social Security Number: New Normal or Huge Warning Sign? ...... 28 What to Do If an Employer Refuses Verification of Tenant’s Employment? ...... 30 Requirements for Employment Verification for Tenant Screening ...... 32 Dismissed vs. Discharged Bankruptcies on Tenant Background Checks ...... 34 Judgments on Tenant Screening Reports ...... 36 Quick-Start Guide to Understanding Rental Security Deposits ...... 38 How to Deny a Rental Applicant Based on a Tenant Screening Report ...... 40

Finding Your Perfect Tenant What Does the Perfect Tenant Look Like?

What Does the Perfect Tenant Look Like?

Most landlords know all about the tenant screening process but what happens when the roles are switched? Recently, my fiancée and I moved from San Diego to Newport Beach and I was put in this situation. Since we weren’t familiar with the area, we wanted to rent a place first before we thought about buying.

I had already rented out my condo in San Diego a month prior so the tenant screening process was fresh in my head. As a landlord, I know exactly what I would want to see from a potential tenant so I tried to emulate that.

Be Professional On our first day of apartment hunting, we looked at 8 different properties and most of them were pretty disappointing. We only ended up applying to one property and the next day the landlord called us to tell us we got the place!

I think your first impression is of utmost importance when you’re renting a property. For each one of our appointments, we made sure that we arrived early and looked professional. This may seem like two very simple things but you would be surprised how many people don’t do this.

Our biggest advantage came by way of our employment. Since I was an engineer and my fiancée was also employed (soon to be starting med school), our income was very

Finding Your Perfect Tenant What Does the Perfect Tenant Look Like? secure and probably made us stand out compared to others. They actually mentioned how excited they were to have a doctor and an engineer as their tenants.

I know you can’t always control your employment situation but the better job you have, the more likely you’ll be to get the place.

References if Needed I actually printed out copies of my free credit score, credit report and prior year’s W2. Most landlords will do their own credit/background check but having yours on hand can’t hurt. The landlord that we ended up renting from was very informal, and she didn’t even require an application fee.

I’m not sure if they called my previous landlord (from four years ago) but he was also a friend so I knew we would get a great reference there. And since the process was so casual, I didn’t offer up any of the information we’d brought along. Instead, all we did was fill out our applications and before I even had the chance to follow up the next day, we got the apartment.

There are a lot of factors for landlords to consider but ultimately it all comes down to your income stability and past references. Things like punctuality and neatness won’t make or break your application but they definitely can’t hurt.

As a potential tenant, you want to do everything in your power to secure the property in question. It might be a little more work to take care of all the secondary stuff but in the end it will strengthen your overall application and give you the rental of your dreams.

Harry Campbell is the founder of yourPFpro.com, a site dedicated to educating people beyond a basic knowledge in personal finance. He graduated from UC San Diego with a BS in Aerospace Engineering and his investment experience includes stocks, real estate and managing rentals. He believes that “the key to personal financial happiness is finding a balance between saving, working and spending on the things you enjoy.”

Finding Your Perfect Tenant Do Tenants Lie on Rental Applications?

Do Tenants Lie on Rental Applications?

The Answer: Yes It should be no shock that on any given day we catch people who lie on rental applications. In 2010 Fidelis Screening Solutions created a report that gave landlords and property managers a better perspective of a tenant’s rental history background.

The premise for the idea was that a database can’t tell you if the person was a bad neighbor or makes less per hour than they implied on the application. The information provided in the Fidelis Character Report is what screening companies have been missing all along. So we’ve heard from landlords that is.

Professionals Can Help Fidelis Screening Solutions provides this product through its corporate site FidelisScreening.net and its landlord site RentPrep.com.

Finding Your Perfect Tenant Do Tenants Lie on Rental Applications?

The report has Certified FCRA Screeners making phone calls to current and previous landlords asking questions such as:

 Has the renter ever had late or partial payments during their lease term?  Are there any noise complaints on file?  What is the condition of the property?  Has the renter ever had late or partial payments during their lease term?

Thorough Checks The character report also includes a screener making a phone call to the applicant’s employer. Questions asked in this portion of the report include, “Length of employment”? “Is the applicant full or part time”? “How many hours are guaranteed a week”? Again, the screener will verify the number to the employer and will not accept a verification from someone that gives a cell number of their supervisor.

If this is the case, the screener will find the company’s contact information and verify employment from there.

Weed Out Bad Information This product is available as an add-on feature for its corporate clients and to all its landlord clients through the RentPrep.com Platinum Report. Turnaround time for this product is 24 hours. This is due to return calls from either the landlords or employers. All attempts made are time stamped with the exact time of the call and date. Whether it was a message left on a machine or with a person, the entire conversation is posted for the client to review.

Steve White is the co-founder and CEO of RentPrep, the landlord division of Fidelis Screening Solutions which provides tenant screening and background check solutions to landlords and property managers. Outside of the office, he can be found enjoying the outdoors and coaching his son's ice hockey team.

Finding Your Perfect Tenant How to Choose the Best Tenant Screening Company

How to Choose the Best Tenant Screening Company

When choosing a tenant screening company, it’s important that you learn as much as you can about their tenant screening procedures, or lack thereof. Being in the credit and background screening industry for years, I wanted to share a few trade secrets in aiding you in your search for the best tenant screening company.

I’m going to answer some of the most common questions we get asked every day, such as:

 How accurate are tenant screening reports?  How much is a tenant background check?  What should I look for in a tenant screening company?

Finding Your Perfect Tenant How to Choose the Best Tenant Screening Company

Beware of Any Tenant Screening Company Claiming to Have the Most Accurate Reports When you’re searching through Google and visiting different websites, you might notice disclaimers aka “The Fine Print”.

Tenant screening companies have to do this because the data that’s pulled will probably be handled and reviewed by a human being somewhere down the line (if it’s not, then you have a problem).

That’s right, human error is the number one culprit of inaccuracy on tenant screening reports.

It’s a cheesy excuse, but it’s true. Because of this, tenant screening companies have to protect themselves from being sued for providing background checks that may not always be 100% accurate.

Criminal History Records Contain the Most Inaccuracies Criminal history record searches are where you’ll find the most inaccuracies in most tenant background checks. The biggest reason for this is because most tenant screening companies do not verify the data that is being inputted, as well as the data being outputted by the databases.

Errors During Data Entry As stated above, human error is easily one of the biggest reasons for inaccuracies in tenant screening.

If you go to order a background check and enter in the wrong social security number, date of birth, or even spell the applicant’s name wrong, you will most likely get a report back that says the person does not have any records in the database.

At first glance, it may seem like a clean report. But a report may only be “clean” because the information was wrong from the very beginning.

Local-Level Criminal Searches May Miss Potential Hits While County and Statewide searches are great and offer a lot of insight into an individual’s criminal history, try to find a tenant screening company that offers a Nationwide Criminal Search as part of their services.

Don’t get caught up with a criminal that lived in Florida and is now residing in Georgia. Save yourself the trouble and look for a Nationwide Criminal Search, especially if you live on the border of your state.

Finding Your Perfect Tenant How to Choose the Best Tenant Screening Company

Background Checks Aren’t Being Reviewed by the Tenant Screening Company Since criminal records mostly only consist of a person’s name, date of birth, and address (not social security numbers), there is opportunity for error on a grand scale if the records aren’t being reviewed by an FCRA Certified Background Screener.

If you run a common name in the State of California, and that common name consists of 50 people with the same birthday, how would you ever know who’s who?

The worst thing anyone can do is decline an applicant because the tenant screening report came back as them being a sex offender when in fact they are not.

So what now?

Use a Tenant Screening Company That Offers Manual FCRA Interpretation In order to combat inaccuracies and non-compliance, it’s imperative that you find a tenant screening company that offers “manual FCRA interpretation” of your background checks.

A manual FCRA interpretation service is when a FCRA Certified Background Screener who is processing the tenant screening report properly identifies the applicant through multiple databases and references before completing and allowing the client to view the report.

The purpose of a service like this is to ensure your background checks are compliant with the FCRA (Fair Credit Reporting Act), which governs how people’s information can be used to make decisions such as renting and employment.

Some instances where manual FCRA interpretation may be needed:  Your tenant’s background check reports that she filed bankruptcy in 2008. Can it be used in your decision-making process?  You come across a record shows the tenant was convicted of a crime in 1997. Is it safe to use it in the report?  Your applicant’s background check reveals he was arrested in California in 2011. Can this be used against him?

At RentPrep, we interpret every report that comes into our office before showing the client the completed results.

Make sure you find a tenant screening company that offers this kind of service, or you may have to stay up tonight to read and learn the Fair Credit Reporting Act.

Finding Your Perfect Tenant How to Choose the Best Tenant Screening Company

There Are No Must-Have Searches the Tenant Screening Company Should Have I get this question all the time, “What searches do you recommend I run on my prospective tenant?” The first thing I always recommend any landlord to do is to make a list of the things you would want to know about the tenant.

Questions you should be asking yourself are:  Am I cool with the person being a criminal?  Does it matter if they ever filed bankruptcy?  Did they pay their rent on time at their last place?

Those are just a few of the many things you should consider when deciding what searches you want to run. Once you have a good idea of the kind of tenant you want, it’s time to pick a tenant screening company with the searches you want.

The searches that RentPrep offers it’s landlord and property management clients are:  Credit Report  Social Security Number Validation  Nationwide Eviction Search  Bankruptcy Search  Judgment & Lien Search  Nationwide Criminal Database Search  U.S. Sex Offender Registry Search  Global Homeland Security Search  Employment Verification  Residence Verification

Never Pay $100 for a Tenant Background Check Whenever you go shopping, whether it’s a tenant screening company or a new pair of shoes, price is always one of the top factors in finalizing your decision. A “not-so-secret” secret of the background check industry is that every company gets their data from most of the same databases.

So if Company A is charging $50 for a Nationwide Criminal Database Search, and Company B is only charging $15, it’s safe to say that you’re getting the same information. Now, how the tenant screening report looks and what information is actually on the completed report may differ.

If Company A provides manual FCRA interpretation, then you may want to go with them. It really comes down to your preferences.

Finding Your Perfect Tenant How to Choose the Best Tenant Screening Company

Quick Tips When Researching Tenant Screening Pricing When looking at the different pricing that tenant screening companies offer, keep the following in mind:  If the company has setup fees, monthly/annual fees, etc., run away as fast as you can. Monthly minimum fees are ridiculous, especially if you only have a few units.  Look for a website that has pricing in plain view.  $15 – $40 per report is a fair price depending on how much data you want to receive.  Stick with a company that offers package pricing. Your costs end up being lower and you will have a pre-made bundle of recommended searches built by the experts.  More complete packages, such as RentPrep’s Platinum Package, are well worth the $30 – $40 they may cost.  Al la carte is an OK option, but you’ll pay way more for these reports in the long run because you’re customizing them.

Customer Service and Tenant Screening Companies That Could Care Less About it Something I hear all the time when someone calls our office is, “Wow. I’m surprised someone actually picked up the phone”. It’s very common for people to tell us that every other company they call either nobody answered or they were greeted from a “foreign- sounding” fellow probably working in a call center somewhere.

I can never stress this enough but look for a phone number! Don’t choose a tenant screening company that only accepts emails for customer service. What if you get a report back with the applicant standing in front of you and you have a question about the report? It’s imperative to have an immediate answer.

Excellent customer service is extremely important when doing a background check on anyone. The completed reports can be confusing to some, especially if it’s your first time ordering.

Conclusion When it comes to choosing a tenant screening company, your own preferences really need to be considered.

Here’s a quick checklist to use when searching for a tenant screening company:  Stay away from companies that claim they have the best or the most accurate data. We all get it from the same places.  Ask if the company offers manual FCRA interpretation of their reports. If they don’t (and many don’t), it may be a warning sign.

Finding Your Perfect Tenant How to Choose the Best Tenant Screening Company

 Make sure the company offers every search you are looking for. If you’re unsure, look for packages as a pricing option.  Never pay more than $40 for a complete tenant screening report.  If you can’t get an English speaking person on the phone, or if their support staff isn’t located in the United States, you should look for a different company.

Finding Your Perfect Tenant The Best Landlord Guide to Charging Rental Application Fees

The Best Landlord Guide to Charging Rental Application Fees

What is the average rental application fee? Are there rules and regulations regarding charging tenants and applicants an application screening fee? Can co-applicants and roommates be charged an application fee? These are a few of the questions this article will answer and help guide landlords through the applicant selection process. Average Rental Application Fee $25 per applicant is the average fee that we see landlords charging. For this reason, we use it as the standard fee on our free rental application on our site. The location and market of the property plays the biggest factor in fluctuating application fees. If the rental unit is in a very desirable neighborhood, and warrants a higher rent, then it’s perfectly acceptable to charge more. In some cases we’ve seen $50-$100 per applicant.

However, before adopting the idea of market based fees, you must consider your local state regulations first to be sure they don’t enforce specific guidelines to charging application fees.

Finding Your Perfect Tenant The Best Landlord Guide to Charging Rental Application Fees

State Specific Some states like California, Virginia, Wisconsin and Minnesota have more specific laws and regulations regarding the collection of rental application fees by landlords. The laws are often similar and can be summarized with some specifics below:

California See the full regulation and law at the CA .gov site.  Landlords may charge (per applicant) a maximum screening fee of $35  The fee must be used for “actual” out of pocket costs of obtaining a background check and the “reasonable” value of time spent by the landlord obtaining the background information.  If the landlord charges a screening fee, they are obligated to provide the applicant a copy of the background check upon request.  If the landlord spends less on the background check and their time than what was charged, a refund must be issued for the difference.  Unless the applicant agrees in writing, the landlord may not charge a screening fee if the rental unit is not available.  A landlord must give applicants an itemized receipt for the charges.

Although it’s not free, a great resource for California landlords is the California Landlords Law Book found here

Virginia Language regarding the Virginia rental application fee laws can be found on this VA Housing Department Document.

The most notable take-away from the state of Virginia’s laws concerning application fees is if the applicant fails to rent the unit and the fee exceeds $32, the landlord must refund the fee within 20 days after the rejection. However the refund shall only be required to cover all sums in excess of actual expenses incurred.

So if the landlord charged $30 for the fee, and can only itemize $20 for the background check, then the applicant would be due back $10.

Wisconsin Language regarding the Wisconsin rental application fee laws can be found on page 8 of this Badger Law document.

Most notable take away for Wisconsin is that “the landlord can only charge the actual cost of obtaining a screening report, and never more than $20.”

More States Minnesota https://www.revisor.mn.gov/statutes/?id=504B.173 Washington http://www.tenantsunion.org/rights/tenant-screening NYC (Specifically within New York City) http://www.housingnyc.com/html/guide/basics.html#Fees

Finding Your Perfect Tenant The Best Landlord Guide to Charging Rental Application Fees

Be Fair A common misconception is that you must charge what you’re paying for their background check. While obviously this number should be relative, there is nothing wrong with figuring in your time and energy as an expense as well. So if the tenant screening cost on that applicant is $25, it is perfectly acceptable to charge $30, accounting for the additional $5 as a processing or administration fee.

In typical “it takes one to ruin it for the rest” fashion, landlords who charge an application fee under the premise that it will cover the cost of the background check, but never intend to run the background check will find themselves in trouble. Application fees are not intended to be for-profit and should never be seen as a source of revenue.

Nothing screams fraud like charging for something that you shouldn’t and tenants will quickly feel alienated. Being fair and honest about the screening process and the charges associated is best-practice for any landlord. Application Fees Can be The Best Pre-Screening Tool Most experienced landlords agree that the fastest way to deter the time-wasters and tire-kickers is to be upfront about charging an application fee to cover the cost of a background check.

In most cases, the tenants that know they have evictions or criminal records that will appear on their background checks will not pay to have you find this information and disqualify them. For those that gladly agree, most landlords will apply the rental application fee to their first month’s rent.

Finding Your Perfect Tenant What Information is on a Tenant Background Check?

What Information is on a Tenant Background Check?

When we think about tenant background checks, we are conditioned to think that it’s only for uncovering negative material. But remember that the point to screening tenants is to find the right fit for your rental unit. So be prepared to see positive information that will help you feel comfortable with your rental decision.

The presentation may differ, however the actual information that is on the tenant background check can be easily broken up into three categories: The Good, The Bad and The Ugly. The Good  A positive verification from a current or previous landlord  No adverse reporting for financial or criminal data  Credit Score above 650 (See how we got this number)

The Bad  Previous bankruptcies (3 years or older)  Multiple arrest records

Finding Your Perfect Tenant What Information is on a Tenant Background Check?

 Credit Score between 500 and 649  Bad recommendation from current or previous landlords (noise complaints, late rent, etc.)  Low balance judgments  State and Federal Tax Liens The Ugly  Current Bankruptcy (filed within the past 3 years)  Multiple and high balance judgments  Multiple and high balance liens  Arrest records resulting in convictions of crimes  Sex Offenders  Credit Scores below 500  Evictions  Invalid Social Security Number Criminal and Eviction Searches Be careful with the screening company you choose, and make sure they are conducting Nationwide searches. It won’t help you to run a background check on an applicant that has just moved to your state within the past 6 months, and you are doing Statewide searches only. Of course they will come up with nothing found. Same goes for evictions.

Look at our breakdown of searches on our pricing page, and you’ll notice that all RentPrep packages include Nationwide Criminal and Eviction searches.

Some landlords don’t care about criminal records, and just want to ensure that the applicant can pay their rent on time and haven’t been evicted in the past 7 years. Others find it way more important to know if an applicant has ever been charged with a Felony, or spent time in jail.

In the end, it is up to you to decide what information you are looking for on the applicants, and then find the tenant screening company that best fits your needs.

Lauren Skorupa is the Screening Manager of RentPrep, the landlord division of Fidelis Screening Solutions which provides tenant screening and background check solutions to landlords and property managersteam.

Finding Your Perfect Tenant Information Needed for a Tenant Background Check

Information Needed for a Tenant Background Check

How Much Information is Needed? A tenant background check can technically be done with as little information as the applicant’s name and date of birth. However it is highly recommended that you have every single applicant, over 18 years of age, fill out a Tenant Rental Application and provide you with as much information as possible. Basic and Pro Packages Regardless of the screening company you are using to perform your tenants background check, obviously the more information the better.

But to specifically order our Basic and Pro Packages, you will need to provide us with the following information:  Name  Date of Birth  Social Security Number  Current Address  Signed Consent

Finding Your Perfect Tenant Information Needed for a Tenant Background Check

You won’t have to send in the signed consent for these two packages, but you do need to have this before running any tenant background check. Platinum Packages If you are ordering our Platinum Package, then you need to be sure that in addition to the above information, you have the following:  Current address and landlord contact information  Previous address and landlord contact information  Employer information (Address, phone number, supervisor’s name, hire date, etc.)  Signed Consent

It is never a bad idea to obtain documents to support the information provided by the applicant. This can include pay stubs, a copy of a driver’s license, copy of Social Security card, etc.

If you think that you’re asking for too much information; remember you are trusting that these people are going to take care of your property, and pay you rent on time.

Finding Your Perfect Tenant How to Do Landlord Verifications: The Right Way

How to Do Landlord Verifications: The Right Way

Requirements for Landlord Verification When an applicant fills out a rental application, and conveniently forgets their current landlord’s phone number, this should raise a flag. Correctly executing a landlord verification can give you the best insight into what kind of tenant the applicant will be.

They can tell you if rent was paid on time, if there were any problems with neighbors, if they had any noise complaints, etc. Most landlords love giving out this information, both horrible stories, and telling you if the applicant was their best tenant to date, and they begged them not to leave.

Before calling, make sure to get all of the following information from a prospective tenant:  Signed consent  Landlord name/Property Management Company  Contact Information (Phone number, or email if necessary)  Address they lived at

A good application will have all of this information covered. Use our free rental application if you’re not sure yours covers everything.

Finding Your Perfect Tenant How to Do Landlord Verifications: The Right Way

The above information is necessary to do a residence verification, but it also helps knowing the little things like:  How long they lived at the address  Rent  Reason for leaving

The more information you have going into a residence verification phone call, the better. This will help you differentiate a friend from an actual landlord. When applicants try to get away with providing the phone number for a friend, very rarely do they inform them of all those little pieces of information.

If it truly is the landlord though, they will easily know all of it, or at least be able to look at their records to confirm the details. How Many Phone Calls? This is going to differ depending on who you talk to, but we have found that 3 phone calls, with messages left, in a 24-hour period is best. Because let’s be honest, if you leave someone three messages and they don’t call you back, why would leaving one more message make them pick up the phone?

Talking to landlords and supervisors is important though, and you need it to help make your decision on whether the applicant is a good fit. To help get return phone calls from stubborn landlords/supervisors, one of our clients will actually call the applicant and tell them that their landlord/supervisor is not returning our phone call.

Doing this will also help to show you how serious the applicant is about renting from you, if they really want the place, then they will call and ask the landlord/supervisor to call back, and follow up with you. On the other hand, if they aren’t so serious, you most likely won’t hear from that individual again.

Finding Your Perfect Tenant What is a Good Credit Score for a Tenant?

What is a Good Credit Score for a Tenant?

(Note: We are using our own actual data to show a good credit score for a tenant.)

Searching around I found some great resources to show what a good credit score for a tenant is. Some even specify what a good score for the rental industry is. But seeing that we have all this data at RentPrep just lying around, I figured we’d share.

If anything it will give a unique perspective of what we see at a tenant screening company that looks at credit scores all day, every day. 649 This is the exact average score we have seen in 2012 among all of the reports we’ve completed. This means if the score is less than 649, it should be at least a little concerning. 723 According to a great article I found on a credit card blog, the “average” credit score is 723. Keep in mind that this is not industry specific, it takes into account everybody and not just renters. Renters statistically have a lower credit score than home owners.

Finding Your Perfect Tenant What is a Good Credit Score for a Tenant?

500 According to Transunion the most at-risk demographic, Adults 18-24, have an average score of 630-650. So if your prospective tenant has a credit score anywhere near 500 you should be very concerned. Insufficient Credit More often than not, a designation of Insufficient Credit means that the tenant does not have enough tradelines or credit impacting accounts. The most frequent situations we see this is with students or younger people, older people with no credit activity in years (family is taking care of them) and a spouse who has nothing in their name. Be most aware of the last one, as explained in our article about background checks on spouses. How to Get the Tenant’s Credit Score If you are a landlord that owns a few units and works from home, getting the actual credit score can be difficult. This is because new FCRA regulations make either a site inspection mandatory (most home based businesses will not meet inspection criteria) or have heavy tenant involvement for identity verification.

Products like TransUnions SmartMove use a tenant identity verification. This means that the tenant will receive an email that instructs them to verify their identity in order to release the credit info to you. The downside is that the completion rate is less than 50% (from what we have seen on our own site that carries this product). Obviously landlords see this as a conversion killer that scares away prospective tenants.

The other option is to use a Credit Decision Model. This gives you a pass or fail without showing the actual credit score. And while there is some credentialing involved, there is no site inspection required. See our RentPrep Credit Check page to see the details of what’s required and what is reported.

Finding Your Perfect Tenant Should Landlords Get a Background Check on a Tenant’s Spouse?

Should Landlords Get a Background Check on a Tenant’s Spouse?

A very common question we hear at RentPrep is should landlords get a background check on the tenants spouse? The best answer: YES

And while you’re at it, order a background check on any co-applicant as well. There have been several cases where a landlord will decide to do a background report on just the main applicant applying for an apartment, and then they come back to us saying something just doesn’t feel right. They screen the spouse/co-applicant, and then we find evictions, judgments, criminal records, etc. If You Don’t Ask, They Won’t Tell When applying for an apartment, these applicants know their history, and know what is going to show. In the case of spouses, they will try to keep records against them limited to one person. They will list only the husband’s name on a lease, or open up all of their credit cards under the husband’s name. They do this so the eviction, or the judgments filed, won’t affect both of their credit. Then when they come to you looking for a place to live, they apply under the wife’s name.

When you order the background screening report, it will seem like they pass with flying colors. No tenant judgments, evictions, liens, when in fact they are swimming in a sea of debt all filed under the husband’s name.

Finding Your Perfect Tenant Should Landlords Get a Background Check on a Tenant’s Spouse?

In other cases, one of the applicants has a criminal record that they are trying to keep hidden from you, the landlord. Why admit to committing a felony, when they don’t have to. They know their chances of getting the apartment with their record, and want you to only run one report on the main applicant The Bottom Line You can never be too careful, and running a background report on all potential applicants is a way to protect yourself from not knowing. Our Character Report can also be useful, as we will speak to current/previous landlords and the employer.

Finding Your Perfect Tenant Can Landlords Ask Tenants if They Are Married? It Depends!

Can Landlords Ask Tenants if They Are Married? It Depends!

Many landlords are unclear about whether they have the right to ask applicants about their marital status. Most are familiar with the Federal Fair Housing Acts that prohibit discrimination against certain protected classes. However, you may not be clear on whether questions about a prospective tenant’s marital status are allowed or not.

Learn what information about marital status you can legally gather from an applicant before your next rental application process. Why Marital Status? Marital status is a big deal to some landlords due to a range of personal beliefs. For example:

 A landlord may not wish to rent to an unmarried heterosexual couple because he mistakenly believes that unmarried couples are less financially stable.  A landlord may not want to rent to an unmarried couple due to her religious beliefs.  A landlord may avoid renting to divorced single mothers with children due to certain stereotypes he believes.

In most states, landlords are within their rights to deny rental applications based on these criteria. In other states, such decisions would be illegal. It’s important to understand the different legal issues concerning tenants and marital status on the federal, state and local levels.

Finding Your Perfect Tenant Can Landlords Ask Tenants if They Are Married? It Depends!

Federal Laws on Marital Status The Federal Fair Housing Act considers a person’s familial status a protected class. The legal definition of familial status centers solely on pregnancy and having children—it does not include marital status. In other words, landlords cannot deny an application based on whether the prospective tenant is pregnant or has children. The federal law does not prohibit landlords from denying an application based on whether a prospective tenant is unmarried, married or divorced. State Laws on Marital Status Even though the Federal Fair Housing Act doesn’t cover an applicant’s marital status, many states have laws that include additional protected classes that go beyond the federal classes. Some of these additional protected classes may include marital status, source of income or sexual orientation.

As of 2013, the states that include marital status as one of the protected classes for housing discrimination are:

 Alaska  California  Colorado  Connecticut  Delaware  Hawaii  Illinois  Maryland  Massachusetts  Michigan  Minnesota  Montana  Nebraska  New Hampshire  New Jersey  New York  North Dakota  Oregon Municipal Laws on Marital Status Local municipalities have the authority to pass laws that provide even greater protection for certain classes than are covered by federal and state law. For example, Palm Beach County in Florida is one place that prohibits housing discrimination based on sexual orientation, age, and marital status, even though the state has no such protective laws.

Finding Your Perfect Tenant Can Landlords Ask Tenants if They Are Married? It Depends!

Know the Law in Your Area As a landlord, you must educate yourself on the fair housing laws and ordinances where your rental properties are located, especially when it comes to a prospective tenant’s marital status. Ultimately, your tenant screening process should focus on more important factors, such as whether the person is responsible, trustworthy and has a history of paying rent on time, every time.

Finding Your Perfect Tenant Tenant Won’t Give Social Security Number: New Normal or Huge Warning Sign?

Tenant Won’t Give Social Security Number: New Normal or Huge Warning Sign?

Below is a story of why it’s so important that you as a landlord, property manager, or real estate agent, get as much information as possible from your rental applicant, including their social security number.

“My Tenant Never Gave Me Their Social Security Number” A client called into RentPrep’s office yesterday very concerned that an applicant that was previously ran through our system over a year ago was recently found to be a registered sex offender.

He had looked up our background screening report on the guy and found that besides a judgment, the guy came back clean. He sent us the original rental application along with the official filing on the Sex Offender Registry of NYS.

When we looked at our report and the rental application, we noticed the applicant had not provided a social security number. He had only given us his name, date of birth, and current address. This is normally enough to find a person, and sure enough, as we searched for him again, we found him right away.

Again our databases came up with nothing but the judgment. We became concerned at this point, and didn’t quite know what to do from there. It’s understandable a tenant won’t give a social security number, but how could we be missing such important information, when we report people for speeding on a daily basis?

Finding Your Perfect Tenant Tenant Won’t Give Social Security Number: New Normal or Huge Warning Sign?

That’s when I looked at the registry a little closer, and noticed that his name did not quite match. He was one letter off on the rental application, and instead of Johnson, it was Johnston (for the sake of keeping the real identity hidden, this name has been changed. Also, the date of birth provided was 1967, when on the registry he was listed as being born in 1972.

The client confirmed that the picture shown was his applicant, so we knew right there that something wasn’t right. We put in this newly found information, and sure enough, there was our guy with his record and all. He had been smart enough to know that there was another guy with a very similar name, but did not have access to his social security number, so had conveniently left that part off of the application.

Our client immediately saw the inaccuracies with the information supplied by the applicant, and the information on the registry, but he was concerned that this had happened to him and his apartment complex. As an owner who runs all rental applicants through a tenant screening background check, he wasn’t sure what else could be done to stop this from happening again. Get as Much Information As You Can From Your Rental Applicant It is crucial to get as much information from your applicants as possible when you are screening your tenants. Have them fill in all blank spots on a rental application, and double check and ask for a copy of a driver’s license and/or social security number card.

If the applicant doesn’t want to hand it over, they are most likely trying to hide something from you. You as a landlord have to do everything you can to protect not only yourself, but the others living in the same building and around the area. This means getting as much information up front as possible and making sure it all matches, then running a tenant screening report to see if there are any positive hits.

Finding Your Perfect Tenant What to Do If an Employer Refuses Verification of Tenant’s Employment?

What to Do If an Employer Refuses Verification of Tenant’s Employment?

When you decide to run a background check on a potential tenant, it’s always a good idea to obtain verification of his or her employment.

But what if you call the employer and they refuse to verify any of the information? This happens quite a lot when calling employers for verification of employment.

Sometimes the conversations go something like this:

Landlord: “John Smith filled out a rental application to rent my apartment. I need to verify his employment as part of my tenant screening process.” Employer: “Sorry, but I can’t give you any information.” Landlord: “Well can you point me in the right direction?” Employer: “No, I’m sorry.”

Other times they will try to charge you a fee of $15-20 and won’t release any information until that is paid. So what should you do if this happens? Take Employment Verification into Your Own Hands If an employer is being uncooperative or they just downright don’t have the answer to what you’re looking for, it’s a good idea to verify your applicant’s employment on your own.

Finding Your Perfect Tenant What to Do If an Employer Refuses Verification of Tenant’s Employment?

Have Your Tenant Provide Proof of Income When trying to verify your rental applicant’s employment yourself, it’s a good idea to ask the applicant for the following documents:  A copy of their pay stubs (ask for multiple pay stubs to see their monthly income)  A copy of an Earning Statement

If they supply you with this information, be sure to look at it carefully and never assume it’s always 100% factual. Look closely to be sure they didn’t use Adobe Photoshop and that it looks authentic. Believe it or not, tenants lie on rental applications from time to time.

It is also up to you to spot the differences between what the pay stub tells you, and what the applicant has told you. You are no longer relying on the answers of the supervisor or Human Resource Manager. The easiest thing to notice is the amount of hours worked. If they say they work full-time, yet are only being paid for 15 hours of work a week, there’s a good chance they are lying to you. Ask for Bank Statements When all else fails, you can never go wrong with asking for bank statements. This will obviously depend on the market and whether the property will attract the type of people ready and willing to share this information.

However, regardless of your market you should never accept this answer: “I don’t have a bank account”.

This is a huge warning sign! Why? Because everyone has a bank account. Besides, if they don’t how will they pay their rent every month? Conclusion Having the bank account information is super helpful, especially if the tenant stops paying you. Once you receive a judgment for the money they owe you, freezing accounts and garnishments will be that much easier.

Finding Your Perfect Tenant Requirements for Employment Verification for Tenant Screening

Requirements for Employment Verification for Tenant Screening

It is important to get as much information from your applicant as possible when they are filling out a rental application. If you are looking to do an employment verification, then there are two main things you are looking to obtain from the applicant: location and consent. Location The first, most obvious, piece of information is the place of employment. Most landlords think that it’s ok to get just the name of the employer and that’s all. This is not right whatsoever, and you need to be sure to get the name, address, phone number, and name of the supervisor. The more information you can get the applicant to provide on the rental application, the better.

I can’t tell you how many applicants try getting away with putting down their friends phone number. Usually it’s easy to tell that this is the case, either you’ll get a personal voicemail or they pick up and at first deny being their employer, and then quickly “remember” that the applicant is in fact employed full time and has been for at least a couple years.

If this happens, and you are only given that they work at McDonald’s, but not which location, there is not much you can do. But when the address is provided, it is very easy to use Google and cross reference the information.

Finding Your Perfect Tenant Requirements for Employment Verification for Tenant Screening

Consent Getting signed consent from the applicant is the second important part of the employment verification process. Many employers will not give out any information over the phone, not even a simple yes they are employed. They will ask you to fax over the signed consent before they say another word to you.

So without this, you will get nowhere in most cases. See our page on FCRA compliance to learn more about written consent here.

Now keep in mind, some landlords don’t like going through the process above, and would much rather get copies of pay stubs handed over to them. This is a good and acceptable practice to use, but you also need to remember that these documents can be altered.

Finding Your Perfect Tenant Dismissed vs. Discharged Bankruptcies on Tenant Background Checks

Dismissed vs. Discharged Bankruptcies on Tenant Background Checks

Bankruptcies on tenant background checks can have one of two dispositions: dismissed or discharged. Learn the major differences between the two bankruptcies when found on tenant background checks. Dismissed Bankruptcy A Dismissed Bankruptcy means that something happened in the process of filing the bankruptcy that stopped the process.

This can be any of the following:  Applicant may have reconsidered filing in the first place, and decided to stop the process  Applicant provided fake information to the court/trustee  Applicant failed to provide necessary information to the court/trustee  Applicant may have failed to attend a class on credit counseling  Applicant may have failed to make payments as agreed (for a Chapter 13 Bankruptcy)

Finding Your Perfect Tenant Dismissed vs. Discharged Bankruptcies on Tenant Background Checks

Discharged Bankruptcy A Discharged Bankruptcy means that the applicant is no longer required to pay any of their debts that have been included. The creditors are no longer able to try to collect on these debts, or have any communication with the applicant about it. The debts have been ‘erased’ and the applicant now has a clean slate.

Depending on the landlord’s standards, either filing may be a warning sign. We’ve seen some landlords who were comfortable with dismissed bankruptcies on tenant background checks and some that see it as a sign of financial trouble.

Finding Your Perfect Tenant Judgments on Tenant Screening Reports

Judgments on Tenant Screening Reports

We get landlords calling into our office all of the time asking us questions about judgment and what they mean on tenant screening reports.

Basically, a judgment is the last resort for somebody who has money owed to them. The most common ones we see are filed by credit card companies, banks, and past landlords who are still owed rent and/or damages. What Information Can Be Found in a Judgment Record? A judgment is reportable for up to 7 years. The only thing stopping us from reporting one during that time is if the applicant has successfully paid the amount owed, and a release has been filed. If it shows on your background report, then the money is still owed, and can be collected on at any point.

This is important to keep in mind if the applicant has several judgments filed against them, and/or judgments filed for larger amounts.

The information available to you in regards to the judgment is as follows:  Date of the filing  Applicant’s name, SSN, and address at the time of filing  Creditor name  Attorney information (if available)

Finding Your Perfect Tenant Judgments on Tenant Screening Reports

Where Can I Find Judgment Records? Judgments can be found at your local courts. I’ve often heard of landlords walking into the court house and digging through documents themselves. While this is cost effective, because there is typically no fee for doing this, the problem is search scope. The only records you will find will be those filed at that particular court house. So if your applicant is from another state, town or county, then you’re missing a whole lot of information.

One trick of the trade that we use is to use an identity development report, or an address history search to see where else the applicant has lived to determine if you’ll need to search another court houses records.

In this day and age, most people do not live in one place or have everything conveniently filed in one place unfortunately. Of course using the right tenant screening and background check company is probably the best way to ensure you’re getting the right information.

Finding Your Perfect Tenant Quick-Start Guide to Understanding Rental Security Deposits

Quick-Start Guide to Understanding Rental Security Deposits

The rental security deposit is a major part of every rental agreement. To protect themselves as far as the law allows, landlords and property managers must understand the rules that govern security deposits in their area. Security deposits are a key part of protecting rental property from damage and landlords from undue repair bills.

Below are a few keys to understanding rental security deposits and how they work. For specific questions or questions about the law as it applies in your city, talk to an attorney who is licensed to practice in your jurisdiction. Rental Security Deposit Laws and Limits Some states, but not all, limit the amount of money a landlord can ask for as a rental security deposit. The limit itself also varies by state, and it may depend on certain terms being present or absent in the rental agreement.

For instance, California limits rental security deposits to two months’ rent for unfurnished properties (Cal. Code § 1950.5(c) (2012)); Michigan limits rental security deposits to one and one-half months’ rent (MCLA 554.602 (1972)); New Mexico limits rental security deposits to one month’s rent if the rental agreement is for less than one year (N.M. Stat. Ann. § 47-8-18(A)(2) (2012)), and Florida sets no maximum on rental security deposits (Fla. Stat. § 83.49(3)(a) (2003)).

Finding Your Perfect Tenant Quick-Start Guide to Understanding Rental Security Deposits

Both landlords and tenants should know the limits on deposits in their own states in order to set amounts accordingly. What Does a Rental Security Deposit Agreement Cover? Even when a rental security deposit is paid in full, the items it may be used to cover are limited in most states. Generally speaking, a landlord may only use a rental security deposit to cover damages caused by a tenant’s failure to comply with the rental agreement. This includes any non-payment of rent by the tenant, but it does not include normal wear and tear on the rental unit. Some states also prohibit landlords from using rental security deposits to cover cleaning charges. Rental Security Deposit Refunds When there is no damage or unpaid rent to which to apply the rental security deposit, the deposit should be returned in full to the tenant. This refunding is typically done at the end of a lease period, although landlords and tenants may agree to make this transaction at another time – as long as it is not later than the time limit allowed by state law.

In most states, landlords who keep any part of the rental security deposit must give the tenant an itemized list of deductions. This list should be send to the tenant’s forwarding address within thirty days, unless state law provides otherwise – for instance, California gives only 21 days to send an itemized list. (Cal. Code 1950.5(g)(1) (2012).

Some states do not require the landlord to provide an itemized damages list if the tenant has not provided a forwarding address in the time given by law.

For instance, Michigan relieves the landlord of the requirement to provide an itemized list of damages if the tenant does not give a forwarding address within four days of moving out of the rental property, but other rules applying to the refunding of rental security deposits still apply. (MCLA 554.611)

Dani is a former attorney that’s handled landlord-tenant disputes in her scope of work, giving her a unique insight into topics on property management, performing tenant background checks and all things related to the rental industry. Check out her personal site if you share her passion as an avid book lover at DaniAlexis.net.

Finding Your Perfect Tenant How to Deny a Rental Applicant Based on a Tenant Screening Report

How to Deny a Rental Applicant Based on a Tenant Screening Report

Every experienced landlord will inevitably have to know how to deny an applicant based on the information on their tenant screening report. Let’s face it, the whole point of the tenant background check is to uncover the information that helps you determine who you should trust to be a good tenant. And while you hope they check out so you can fill the vacancy, you have to be prepared in the event they don’t.

Regardless of the reason, whether it’s a judgment or an eviction, the action of denying the tenancy is considered an adverse action. According to the FCRA, this action requires a process of communication that must be followed. When is an Adverse Action Notice Required? An adverse action notice is required when a landlord denies an applicant based on the tenant screening report. This includes the denial of tenancy, as well as the approval with additional terms such as an additional deposit or anything imposed outside of the landlord’s standard rental terms due to “higher risk.” Step by Step Guide to Issuing Adverse Action Here is a step-by-step list of how you should issue an adverse action notice:

Step 1: Determine if the adverse action is going to be approving tenancy with conditions such as extra security deposit or additional lease terms, or a complete denial.

Finding Your Perfect Tenant How to Deny a Rental Applicant Based on a Tenant Screening Report

Step 2: Once you determine your choice, you need to prepare an adverse action notice. You can search the internet for an adverse action template, or you can use our free notices we include in our Landlord Essential Kit

Step 3: Be sure to mail the adverse action notice to your applicant, along with “A Summary of Your Rights Under the Fair Credit Reporting Act” included. Are Landlords Required to Give a Copy of the Background Check to the Tenant? Landlords are not required to give the tenant a copy of the background check. Once the adverse action notice is given, the tenant or applicant can communicate directly with the tenant screening company as advised in the letter with contact information provided.

The tenant screening company can then provide a Consumer Copy once the tenant or applicant verifies their identity by sending a photo copy of their driver’s license or other form of ID. We provide instructions and the request form on our Renters Relation page.