Recently there has been much discussion and confusion, about how to deal with, or not, individuals who have a criminal record when applying for rent.

Below is a link concerning…Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions,

https://portal.hud.gov/hudportal/documents/huddoc?id=hud_ogcguidappfhastandcr.pdf

The Fair Housing Act prohibits discrimination in the sale, rental, or financing of dwellings and in other housing-related activities based on race, color, religion, sex, disability, familial status or national origin.

This should be a no-brainer for Landlords who represent themselves as professionals and should know what the anti-discrimination laws are.

Discriminating against applicants with a criminal record is another issue that landlords need to be concerned about, it can mean walking a fine line. For example:

Can I reject for a misdemeanor or a does it have to be a felony?
What kind of misdemeanor or what type of felony can I reject for?

Walking a fine line means using some common sense.

Conducting due diligence to determine what kind of history the Applicant has as a tenant, is important in deciding, and may take the criminal record decisioning out of the equation.

But consider this…many Individuals with a criminal record are good tenants and good people. Sometimes their past does not define their future. This should be considered, and therefore Inquiries need to be made to determine their tenant worthiness and credit worthiness. For example:

Inquire with current and previous landlord to determine tenant worthiness.

  • Did the Applicant constantly miss rent payments or pay late?
  • Did the Applicant abide by all the terms in the lease agreement?
  • Were there any problems with the Applicant, like verbal or physical abuse?
  • Complaints from other tenants regarding illegal activity?
  • How long did the Applicant rent for?
  • What was the lease amount?
  • What was the address of the rental?
  • Would you rent to the Applicant again?

Compare the answers to these questions… to the information you received on the rental application. Was the Applicant truthful?

Obtain a consumer credit report.

  • Compare the information on the credit report to information on rent application, including Name, DOB, Address or previous address. Does it match?
  • Have all Credit Grantors reported as paid on time?
  • No Credit history? Red flag!

Evictions

  • Order an eviction report and ASK the applicant. Have you ever been evicted? And state…be advised that I am going to check.

After you have completed the tenant and creditworthiness due diligence, it should become clearer as to what type of Individual you are dealing with. Based on these inquiries, you should then decide. Accept or Reject.

THIS IS THE BEST WAY TO AVOID CLAIMS OF DISCRIMINATION, DO NOT BASE YOUR DECISION ON JUST ONE FACTOR. That being a criminal record.

Speaking from a personal point of view, as a landlord, I would never reject an applicant for any reason, other than…you did not meet my criteria.

Every landlord should have a list of what that criteria is, and stick to it with every rent application:

Sufficient income/Stable employment
Proof of Income 3 x that of rent
Every intended occupant must be listed on the application and screened
No guests for longer than 7 days
No smoking
No pets
Good landlord references
Good credit history
On time rent payments
Abide by the terms of the lease agreement
Must have 2-3 months of paid utility statements that show financial responsibility.
Must have bank account that shows pay check in, rent payments out.
Must have a personality and attitude that I like…and any other criteria deemed appropriate.

If the tenant does not meet this criterion, the fact that he/she has a criminal record that you don’t want to decide on, becomes a non-issue.

Other reasons you may give to NOT PROCEED with rental application:

  • I chose another applicant. HOWEVER! You should have another Applicant, do not get caught in a lie if push comes to shove and you need to prove it.
  • I am reviewing other rent applications and will let you know if you are the successful candidate. You should have other rent applications.

In most instances… Individuals who have a criminal record and continue to lead that type of lifestyle, will not meet your criteria.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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When it comes to the profitability of your rental business, there is one situation where a rental application is far more important than a lease agreement. Even the strongest lease language may not help reduce income loss if the tenant leaves early.

It is highly unlikely that a landlord will be able to collect the remaining rent due on the tenancy agreement if the tenant leaves early. Landlords have a duty to minimize losses, so a landlord must act quickly to fill any vacancy, even an unexpected one. Despite any wording in the tenancy agreement to the contrary, the exiting tenant only will be liable for rent until a new tenant is found.

The tenant also is on the hook for any damage he or she may have caused, and for any reasonable costs of acquiring a new tenant. However, the landlord will need to take legal action, offer evidence to prove these losses, and then attempt to collect against the former tenant. That could take months — or longer.

It can be difficult to prove the landlord’s actual losses in the event a tenant leaves early, like in cases where the vacancy is advertised for free online and a new tenant is located quickly. This problem is more pronounced when the landlord attempts to raise the rent between tenants. In that situation, it may be hard to prove that any resulting delay in filling the vacancy is the fault of the exiting tenant.

Early termination fees or liquidated damages — an agreed-upon amount to be paid for breaking the lease — may be expressly prohibited by local tenancy laws. To the extent that liquidated damages are allowed, the amount must be closely associated with actual out-of-pocket losses that the landlord suffers, rather than based upon the perceived value of the lease agreement.

In a good rental market, it is entirely possible that the tenant can break the lease and wind up owing nothing to the landlord.

That’s why it is so important for landlords to focus on tenant screening rather than relying on the tenancy agreement to keep the property running efficiently. It is particularly important to:

Look at an applicant’s rental history to determine whether the person has a habit of moving out early;
Speak with the current landlord to verify whether the applicant is breaking the lease and moving early now;
Be wary if the applicant says the current landlord is not available, or the tenant does not want the current landlord contacted for any reason; and,
Verify the information in the rental application, including identity, previous addresses, employment, banking details, and references, because that information will become crucial when pursuing collection.

While tenants who leave early may be liable to pay for some losses, like rent until the unit is filled, costs of advertising and showing the unit including tenant screening, and damage to the unit, these items must be proven if the landlord wants to collect.

To do that, it is necessary to make a record of those charges. Estimates will not suffice.

To collect rent owed under the tenancy agreement, it is crucial to show best efforts in filling the vacancy in a timely fashion. For instance, a landlord may want to start a file that shows the date the vacancy was advertised and then track responses to that ad. It’s a good idea to list unqualified applicants and to be prepared to explain why those applicants failed to qualify. While time is of the essence, it is equally important to find the right replacement tenant; there is no obligation to risk renting to an unqualified applicant.

In areas where security deposits are allowed, the landlord still must follow the applicable rules for deductions, accounting and return of the deposit, even where the tenant has broken the lease agreement.

For these reasons, it is far safer for a landlord to focus on finding the right tenants then it is to assume that the lease will fix every problem, or protect the landlord from income loss should the tenant decide to leave early.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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Police to Landlords: Check Up on Your Properties

July 17, 2017

The neighbours knew. The police knew. But the landlord apparently was unaware that the rental property had become a drug den. Calgary police say they were called to the suburban property 40 times in six months, including calls to attend three overdoses. Police also say the tenant had sublet rooms in the house to several […]

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Common Eviction Mistakes (and How to Avoid Them)

July 17, 2017

Eviction claims are difficult to navigate, and difficult to enforce. The process can take months and cause income loss, so it’s easy to lose sight of the finish line. Here are some steps landlords can take in advance that make the process a little more palatable — and a lot more effective: The Endgame: Collecting […]

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Ontario Expands Rent Control, Sets 2018 Rent Increase Guideline

July 17, 2017

Ontario’s annual rent increase guideline for 2018 is set at 1.8 per cent. That figure represents the maximum a landlord can raise a tenant’s rent without first seeking approval from the Landlord and Tenant Board. It applies to rent increases for the calendar year 2018. Ontario recently passed the Rental Fairness Act, 2017, which expanded […]

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How To Find the Right Pest Control Service

July 3, 2017

Do-it-yourself pest control at a rental property can lead to liability should tenants or guests be exposed to toxic chemicals. Likewise, maintenance workers who lack experience are ineffective at curbing infestations, and run the risk of injuring tenants by mishandling pesticides. Landlords have a duty to keep pests at bay, and the best way to […]

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Law Would Require Landlords to Prevent Asthma

July 3, 2017

New York’s City Council is considering a proposal that would require landlords within the city to inspect for and correct conditions that create indoor allergens. According to a statement released by The Coalition for Asthma-Free Housing, 48 of 51 council members currently sponsor the bill. The measure also has the support of area doctors. If […]

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Seattle Landlords Ordered to Provide Tenants with Voter Registration Info

July 3, 2017

The Seattle City Council has passed an ordinance that requires landlords there to provide voter registration information to existing and new tenants. The measure, which was passed Council 6-0 and was signed by the mayor, goes into effect later this month. According to lawmakers, renters, especially those who move frequently, are less likely to vote. […]

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TVS Members Can Report Rent Payments to TransUnion Credit Bureau

June 27, 2017

TVS has launched a sister website LandlordCreditBureau.com , and now is reporting rent payments to TransUnion Credit Bureau. Reporting to Experian and Equifax is being pursued. Rent payments are reported to TransUnion every 30 days. TVS members can report rent payments directly to LandlordCreditBureau.com (LCB) from www.tenantverification.com – you don’t need another login, or to […]

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The Secret to Managing Long-Term Tenants

June 15, 2017

Landlords are split on the question of long-term versus short-term tenancies. On the one hand, long-term tenants — those who stay more than a year — allow landlords to minimize costs associated with advertising a new vacancy. On the other hand, long-term tenants can stifle a landlord’s ability to increase rent. There are other advantages […]

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