Different landlords use different methods for screening tenants. For some, choosing the right tenant is as simple as a gut feeling. Others turn to artificial intelligence to conduct more elaborate personality tests to find the ideal renter.

Rules that protect tenant privacy serve as a damper on what information a landlord can use to make a decision about an applicant. Going beyond the approved areas of questioning can lead to income loss.

Regardless of the method a landlord uses to extract information from a rental applicant, the information obtained will only be as useful as the questions presented.

To make the best decisions when screening tenants, a landlord needs to know what to ask:

Can the applicant prove his or her identity?
Does the applicant have sufficient income to pay the rent?
Does the applicant’s situation meet the requirements for the property in terms of occupancy limits or other nonnegotiable restrictions?
Does the applicant have a history of breaching tenancy agreements, namely late rent payments, property damage or eviction?
Does the applicant have a history of disturbances, unsanitary conditions or criminal actions that impact the safety or comfort of others?

Landlords Don’t Need to Beat Around the Bush

The first step in tenant screening is to obtain the answers to the qualifying questions from the completed rental application. If the rental application looks good on the face of it, the next step will be to verify that information. Landlords don’t need to waste time trying to outsmart or psychoanalyze each applicant. Tenant screening reports and references will more readily expose dishonesty.

Tenant Screening is Not a Moving Target

When it comes to tenant screening, it’s best to stick with what we know works. The value in using the rental application to screen each prospective tenant is the ability to hone down the list of questions to only what is necessary to determine if the applicant is qualified. That way, a landlord can push back hard when a tenant refuses to undergo a tenant background check or submits an incomplete application. A landlord does not have to make exceptions for applicants on a case-by-case basis or allow anyone to sidestep the qualification process. That’s not the case if the questions asked are not relevant and straightforward.

A landlord who rejects an applicant may be hard-pressed to defend the action if the tenant background check included any irrelevant or unnecessarily personal information. It is better to stick to qualifying factors. For example, avoid sleuthing for protected information in the applicant’s social media posts. This information is unreliable and can be manipulated or staged to impress a landlord. A credit report cannot.

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.

{ 0 comments }

Tips for Managing Students and First-Time Renters

by Chris on September 10, 2018

Rental properties located near colleges and universities often are lucrative investments. Landlords enjoy a steady stream of prospective renters but leasing to students or inexperienced tenants is not without its challenges.

Students tend to be young — 18-22 — and living away from home for the first time. These renters tend to be inexperienced with respect to both the legal responsibilities of a tenancy agreement and the practical aspects of renting. They have yet to reach their full income potential and may be living hand-to-mouth, often with roommates to offset expenses. And these tenants tend to be very, very busy.

Students are good teachers. Nothing exposes the holes in a landlord’s property management policies like renting to inexperienced tenants.

But the fact is, students are no different than other tenants, and the best strategy is to treat these renters the same as others. If you want student renters to act like adults, then don’t treat them like children:

Flexibility is Key

Landlords with properties near colleges should be thinking in terms of “allowing” students to apply for vacancies, not targeting students or renting to them exclusively. Rental ads should avoid “perfect for students” or “student rentals” as these terms can be viewed as discriminatory, particularly to families with younger children. Perhaps a professor also would like to live close to the college. A landlord can’t tell a parent with three kids that he or she can’t rent an apartment that previously housed four roommates.

There is no such thing as a “student lease” or “student rental” when it comes to private, off-campus housing. Whatever concessions are provided to students also must be made available to other tenants. The tenancy agreement should provide all the flexibility necessary to rent to anyone, including rules for noise and other disturbances, proper use of the property and so on. The lease must be easy-to-read and cover anticipated situations.

Landlords planning to rent to students should not place unrealistic demands on tenants. Tailor the lease with flexible terms, like allowing the option of renting for three, six, nine or twelve months to cover most situations. Demanding a full-year lease from reluctant students does not guarantee the tenants will stay, take care of the property, or pay rent for the final three months. That’s true of any tenant. Working out a compromise with a tenant who can’t lease year-round might yield better results.

Outdoor maintenance of the rental property is difficult for most tenants, even those who have time. Don’t require lawn mowing, manual watering, snow shoveling and so on if that is not practical. It can wind up being a losing battle that only causes frustration, animosity and property damage. Also, it may be discriminatory to look for a tenant who can perform those tasks and reject others who may have physical limitations.

Income Verification and Rent Payments

Income verification should be handled the same way for each rental applicant — the applicant completes a rental application listing the source of income and provides sufficient documentation to confirm that income. If student renters are anticipated, a landlord may want to allow for a co-signer in the case the tenant lacks the income or the credit history to rent on their own. The applicant can provide information on the co-signer in the application under consideration. If this option is offered to students, it also must be provided to other renters in similar situations like a tenant with a new job or a long period of unemployment.

Co-signatories are an easy strategy for overcoming income hurdles. The co-signer will have legal liability only if the tenant defaults, but in that event, the landlord has the equivalent of a lease guarantee.

Rarely, landlords will include a parent or other responsible party as a co-tenant on the lease. That makes the parent equally liable for the rent payments, but it also confers other legal rights, like the right of possession. A parent may decide to stay in possession on a holdover or sublet the property. In the event of a breach of the tenancy agreement, the landlord would have to legally evict both the tenant and co-tenant  and that might trigger a protracted legal battle. Also, there may be ramifications for the co-tenant, like problems refinancing or obtaining a mortgage when the lease lists a different permanent residence.

Report Rent Payments

As with any tenant, landlords should sign up to Report Rent Payments. This is the best way for first-time renters to build credit. After paying on time each month of the lease term, the tenant leaves with a Certificate of Satisfactory Tenancy to show to the next landlord.

Signing up to Report Rent Payments also provides incentive for an established co-signer — someone who doesn’t want to ruin a stellar credit record — to keep in touch with the tenant regarding rent payments.

Both the tenant and co-signer should receive the Notice to Tenant which explains the benefits and consequences of the service. This Notice should also be incorporated into the tenancy agreement.

Screening Tenants with Little or No Credit

As with all rental applicants, with students it is important to verify the person’s identity so that the tenant screening reports are an accurate match. This prevents an individual from using an alias or hijacking someone else’s credit report or references. Run a tenant credit check on the applicant even if the person is young. Little or no credit is one thing. Bad credit is another.

Also, be sure to screen the co-signer. Have this person complete a rental application and sign the consent to a background check. This is the person who purportedly possesses the income and credit to pay the rent. Verify it. You don’t want a co-signer who needs a co-signer.

Educating Students

Landlords can rely on a co-signer to pay rent if the tenant defaults, but not to manage the tenant day-to-day. Landlords need to remember they are dealing with inexperienced renters.

Be prepared to educate students (and all tenants!) on the responsibilities under the lease. A first-time renter will be oblivious to things that might seem obvious to the landlord, but that’s true of other tenants, too. This starts with the leasing process. Explain that the rental application can’t contain fraudulent statements, and that the lease is a legal commitment and the consequences for breaking it will follow this person around for years.

The lease-signing process is a great opportunity to reiterate house rules and assist tenants in understanding their day-to-day responsibilities. An orientation on move-in day is instrumental in extending the life of appliances, reducing complaints, and keeping the property safe. Tenants should understand what to do in case of an emergency, and how to report conditions on the property like pests or crime.

Even if students or first-timers already have moved in, it’s not too late to jump in and actively manage the property. That can be as simple as communicating regularly with tenants so they are reminded that someone is in charge.

With students, there is a tendency for landlords to micromanage. Surprise raids to see if units are clean (a landlord did this) might work in the military, but not with tenants. They are adults, not children, and all tenants have a right to their privacy and quiet enjoyment.

Be a Mentor

Be a good landlord to first-time tenants. Be responsive: answer phone calls, make repairs, settle disputes. Reward tenants when they do the right thing and challenge them when they don’t. Active property management prevents rent defaults and property damage. And good service is rewarded with good ratings and reviews and will have great tenants lining up for the opportunity to live at the property.

Don’t Underestimate Students

Don’t take advantage of student renters. Students may be a vulnerable population, but they have savage defenders. No one wants to fight with angry parents or zealous tenant advocates who only see one side of the story and pursue legal action or bash the landlord’s reputation.

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.

{ 0 comments }

Landlord Punished for Double-Dipping: Understanding Sublets and Substitutions

September 10, 2018

An Ontario landlord is in the news after she was ordered to return rent she collected from students while at the same time subletting the property on Airbnb. After apparently signing a tenancy agreement, the students asked the landlord for permission to sublet their rooms over the summer so they could return home. The landlord […]

Read the full article →

British Columbia Announces Allowable Rent Increase for 2019

September 10, 2018

The standard allowable rent increase for 2019 in British Columbia is 4.5%. This figure represents the maximum a landlord can increase rent without obtaining an order from the Residential Tenancy Branch or tenant consent. The allowable rent increase has climbed over the past three years from 3.7% in 2017 and 4.0% in 2018. Last year, […]

Read the full article →

Landlord Locked Out, Tenant Refuses to Leave

August 27, 2018

A Tulsa landlord is struggling to recover his property after his lease-breaking tenant locked him out and refuses to answer the door. According to a report, the tenant was offered the rental home out of kindness. He was supposed to stay for three months, pay nominal rent, and do a little work around the property. […]

Read the full article →

Risky Business: Facebook Housing Ads Under Scrutiny

August 27, 2018

Landlords using Facebook to target the “right” renters may want to rethink that strategy in the face of growing controversy over the practice of choosing tenants based on their interests. Last week, HUD filed a complaint accusing the social media giant of promoting discrimination by allowing landlords to choose or block certain demographic groups. The […]

Read the full article →

Portland Landlords Prepared to Fight Limits on Tenant Screening

August 27, 2018

Landlords in Portland, Oregon are gearing up for what could be a contentious battle as the city council there reportedly is poised to consider a sweeping rental reform that would limit tenant screening and security deposits. More Housing Now!, a landlord advocacy group formed by Multifamily NW, Rental Housing Alliance Oregon, and Oregon Rental Housing […]

Read the full article →

Landlord Fined $100,000 for Short-Term Rentals; Others Under Investigation

August 27, 2018

The Attorney General for Washington, D.C. announced that he is investigating 19 landlords who own 33 buildings after tenants complained that vacation rentals are being offered at the apartment complexes. The office says it has received complaints from long-term tenants at the buildings who face increased security risks and disturbances from noisy and rowdy short-term […]

Read the full article →

Nightmare Tenant Seeks New Rental Home

August 13, 2018

A tenant from hell recently was evicted. Now, she’s looking for another rental home. Will it be yours? An 81-year-old Ontario landlord had to battle for months to evict a deadbeat tenant for failing to pay rent. After an initial LTB order to evict, the tenant abused the review and appeal processes numerous times. Although […]

Read the full article →

7 Reasons Why Landlords Need to Run Tenant Credit Checks

August 13, 2018

Is your rental applicant telling you the whole story? A tenant credit check is a simple way to verify the applicant’s qualifications and gain peace of mind. At the same time, it’s an easy way to flag an applicant who is twisting the facts or holding back pertinent information. Some landlords avoid tenant credit checks […]

Read the full article →