Why a Lease Agreement is Not Enough
Most landlords know they need a written lease agreement in order to protect their rights when leasing a property. However, some think that’s enough.
While the lease defines the rights and responsibilities of landlords and tenants, it does nothing when it comes to screening tenants. And, as experienced landlords know, effective tenant screening is the key to successful tenancies, regardless of the tough talk in the lease agreement.
No lease, no matter how thorough, will protect a landlord if they choose a bad tenant.
A rental application, on the other hand, is a priceless tool when it comes to weeding out bad tenants and keeping a rental investment profitable. Just take a look at all that the rental application can accomplish:
1. Verifying an applicant’s identity is paramount when protecting the landlord’s safety, the safety of other tenants, and when choosing a good tenant. It is also crucial for debt collection should the tenant leave the property owing money. The rental application, not the lease, is the path to verifying an applicant’s identity.
This information also is crucial in the event of an emergency.
2. It is difficult, if not impossible, to run an effective tenant background check without the information obtained in the rental application. Whether it’s simply ascertaining tenant preferences such as non-smoking or no-pets, or catching a professional tenant bent on scamming the next landlord, an application is the only effective way to compare prospective tenants and find one that suits the property.
3. Income and credit information is detailed in the rental application, not the lease. This credit information can expose a tenant who does not take the responsibility seriously, or, at the very least, needs to provide further documentation to show he or she can pay the rent. Going forward to lease without checking a tenant’s credit report is careless.
The credit report can reveal other inconsistencies in the information provided by the applicant. When a risky applicant is identified and rejected early in the leasing process, a landlord nightmare can be averted.
4. In addition to running tenant screening reports, every landlord needs to speak to an applicant’s references, including previous landlords. This allows the new landlord to determine if the applicant may be hiding pertinent information.
Personal references requested in the rental application also serve as a road map for locating deadbeat tenants.
5. One of the most significant portions of the rental application appears at the end. This is where the declarations are contained. These are disclosures that allow the landlord the right to investigate the applicant’s rental history. Without this consent, the landlord will be missing out on critical information that is contained in tenant screening reports.
In addition to providing consent to a tenant background check, this declaration section serves to warn the applicant that false, incomplete, or misleading information may rise to the level of fraud, and could be grounds for eviction later in the tenancy.
To maximize this incentive, applicants should to be told about the declaration provisions before they begin to fill out the application. Otherwise, they may discover it only after it’s too late for them to go back and correct their answers.
Pushing for a signed lease agreement may seem like an efficient way to fill vacancies, but in reality, it greatly limits landlords’ rights, and makes if much harder to determine whether they have found the perfect tenant, or the perfect nightmare.
Enlist these basic tips for getting the most out of a rental application:
In today’s tech-addicted world, applicants may want to fill out applications online. Some new businesses specialize in offering these services to eager tenants. But for landlords it’s buyer beware.
That’s because the rental application is such a crucial tool in verifying identify. Online, it’s far easier to get tricked into thinking the applicant is the ideal tenant, when in fact the information is a scam.
For your protection, never accept an online rental application form that does not meet your exacting standards, especially if you haven’t seen it before. Also, avoid offering a tour of the property until you have verified the identity of the prequalified applicant in a safe location using a photo ID.
Keep your application questions focused on the correct goal — finding out if the person is qualified for the rental property. Avoid asking personal questions, like marital status or place of origin as that may be discriminatory.
If multiple adults will be signing the lease agreement, ask each to fill out a rental application.
Incomplete rental applications are a red flag and should be treated with extra scrutiny.
ALWAYS verify the information in the rental application before moving on in the leasing process.
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.
