Make tenant screening as stress-free and effective as possible by avoiding these easy-to-fix mistakes:
1. Demanding cash rather than check for rent deposits or application fees.
Some landlords prefer cash for application fees or rent and security deposits. The theory is that it takes two or three weeks to confirm that the checks cleared, and the landlord doesn’t want to get ripped off. That problem is better solved by a more vigilant tenant screening process — after all, a check could bounce anytime throughout the tenancy.
Accepting checks for application fees and other deposits creates an opportunity to spot fraud by comparing the information — name, address, phone, bank — to the rental application and tenant screening reports before deciding to rent to the applicant. Exposing fraud is better than sidestepping it.
2. Accepting online applications without prequalifying and verifying identity.
Rental applications that are provided by third parties, such as rental advertising platforms, are a hotbed for tenant fraud.
The online platform creates a wall between the landlord and tenant that encourages fraud — falsifying identity or qualifications.
While there is no harm in sending documents electronically, rental applications should only be provided to applicants the landlord already has met in person.
Prequalify applicants before agreeing to meet, and demand to see a valid photo ID before providing a rental application.
3. Not screening all adults in the unit.
Applicants who do not qualify because of bad credit, criminal background or prior evictions often will team up with a more qualified applicant. If the “original tenant” or “head of household” moves out, the landlord is left with an unvetted occupant at the property.
Landlords cannot afford to give cover to an unqualified applicant, especially if the person has a history of violent crime or destruction of property. the only way to protect the property and other tenants is to run a tenant background check on all proposed adult occupants.
4. Running tenant screening reports before verifying the rental application.
Unqualified tenants often can be eliminated by reviewing the rental application. If the person is not qualified, there is no reason to continue through the tenant screening process.
If the person appears qualified, the next step is to independently verify the information in the application. Check references and confirm rental history before moving on to the final stage — running tenant screening reports.
By screening tenants in this way, the landlord will save time and may be able to avoid discrimination claims. For instance, if the applicant is instantly rejected due to a negative criminal background check, the landlord will have a more difficult time defending the decision rather than discovering that the person was not qualified for other reasons before uncovering the criminal history.
5. Failing to return the application fee when no reports are ordered.
Application fees are meant to cover the cost of tenant screening. Most states allow a reasonable amount for application fees but draw the line when it comes to landlords using these charges as a profit center.
If the applicant is not under consideration or the landlord decides not to run tenant screening reports, the appropriate action is to return the application fee.
That’s another reason why it’s better not to take cash for these upfront fees — it makes the process of returning the money that much more difficult.
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).
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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.