Top 3 Reasons to Reject a Rental Applicant

by Chris on November 10, 2014

Vacancies cost money, and that financial pressure can cause landlords to make a serious mistake: choosing the wrong tenant.

Nothing is more expensive than a bad renter. Not even a vacancy. So it pays to hone in on what you need in a tenant. That means rejecting the ones who won’t work:

1. Tenants with a record of eviction. Experienced property managers and landlords agree that renting to a tenant who has been evicted in the past is not worth the risk. Why? Why not give a person a chance to rehabilitate?

 tenant screeningWhile there may be some worthy tenants who have been treated unfairly by a previous landlord, odds are against it. That’s because the eviction process is geared toward protecting tenants. All along the way, there are multiple opportunities for innocent renters to tell their stories, and have the case against them dismissed.

Due diligence will uncover whether this individual is a victim, or someone who victimized previous landlords by living rent free throughout the arduous eviction process.

Unfortunately, discovering a past eviction takes the skills of a detective. Most cases are decided in dispute resolution, and tenant names are hidden from view for the very reason landlords want to have the information. As a result, there are applicants out there who literally have been evicted dozens of times, leaving behind a string of landlords who are out thousands of dollars as a result.

There are some tell-tale signs of an eviction:

A credit report may show the resulting judgement for unpaid rent or damage to the property. The report may also contain addresses that are not listed in the rental application. That could be the result of the tenant hiding information.

One of the best ways to discover a prior eviction is to speak with the current and past landlords. You may get an earful if you simply take the time to ask.

It is still worthwhile to include the question on a rental application, and ask that the prospective tenant sign a declaration that the information in the application is truthful and complete.

2. Tenants who can’t — or won’t — provide supporting documentation. Privacy laws protect tenants from unreasonable questions or disclosure of personal facts, but nothing prevents a landlord from finding out if a rental applicant is qualified. A prospective tenant who asks that you not make a copy of his or her ID or pay cheque stubs is not the same as the person who refuses to produce the documentation at all. The same goes for names of references, including previous landlords.

Tenants who become belligerent at the thought of producing some supporting documentation likely are hiding something — after all, how did they get into a previous rental without showing identification or financial documents?

Providing false information on a rental application is fraud. Hiding information that is relevant is no different.

3. No proof of income.  Some landlords get excited over a tenants who purports to have a lot of cash.  Perhaps it seems a better option than the tenant who is struggling to balance the budget. But, the fact that the person pays in cash does not prove financial responsibility, nor is a reason to forgo a tenant background check.

Legitimate cash-only tenants are rare. Ask yourself this: Why is this “wealthy” person looking to rent your particular property. Does it make sense?

Unfortunately for legitimate tenants, the trademark of a criminal is cash-only transactions. These individuals tend to target rental properties to carry out illegal activities. While a tenant’s income may seem like none of your business, if the tenant earns it illegally at your rental property that can lead to long-term vacancy, property damage and even  forfeiture. Collecting any unpaid rent is extremely difficult if the person has concealed his or her true identity.

If you accept a cash-only tenant, be sure to run a credit check to verify the person’s identity and the truthfulness of the information in the rental application. Ask for supporting documentation, like proof of funds. Ask for credit and personal references, including previous landlords.

Self-employed tenants should consent to a tenant credit check. Avoid renting residential property to a corporation or business, especially without checking the proprietor’s credit and asking for a personal guarantee.

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 in 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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