Don’t Get Stuck Paying for Tenant Crime

by | Nov 22, 2010 | Tenant Screening

“She seemed like such a nice girl.”  That’s what one landlord thought the first time she met her new tenant. 

The young woman had just moved to Alberta from Saskatchewan.  She was outgoing, personable, and appeared to have an easy time making new friends.  A lot of friends, in fact.  All men.  A different man every day.  It wasn’t long before the landlord knew she had a crisis on her hands.  This tenant was using the rental property for her illegal “business”. 

The police came to the landlord and complained that the rental property was a flophouse, and they wanted the tenant out of there.  This made the landlord laugh.  “Do you have any idea how hard it is to evict a tenant here?”

Recently, a Calgary landlord was shocked to find that his tenant was using his property to manufacture drugs. The man had tampered with the electrical wiring and sparked a fire.  The resulting damage has cost $60,000 to date, and the property value has dropped $100,000 as a result.  The landlord also found out that the damage from the tenant’s criminal activities are not covered under the insurance policy.

In Vancouver this past summer, landlords filed a lawsuit against their tenant over a marijuana grow-op.  In order to water the plants, the tenant re-routed some of the pipes and plumbing fixtures, which will cost thousands of dollars to repair.  The landlord was alerted of a potential problem when an adjacent tenant complained that the water flow was hampered. 

Like all landlords who face this situation, these landlords will have to fight it out in court, and then hope they can collect.

Crime in rental properties is a reality that all landlords want to avoid. Unfortunately, it is very difficult for landlords in Canada to screen tenants for past criminal activities, which is a good barometer of their character going forward.  But landlords are not without resources when it comes to tenant screening.  By properly analyzing the information they can access, landlords can find clues that the applicant has something to hide:

Check a photo ID or use another method to verify that an applicant is using his or her real name.

Look for clues in the tenant credit report.  Maxed out credit cards could be the result of cash advances to fund “business” activities when an applicant can’t qualify for a loan – which can be a sign that the business is illegal. Also, look for judgments, and job history or previous addresses that are not listed on the application.

Verify the applicant’s rental history.  Each of the tenants described above was evicted – and we can assume they all went on to look for another place to live.  A previous landlord reference is one of the best ways to avoid this sort of trouble. Confirm dates with the previous landlords to make sure there are no time gaps between addresses when the applicant has not accounted for his or her whereabouts.   

Pay special attention to the applicant’s employment history.  Is it patchy without good reason?  Are they working for themselves? If self-employed, is there any evidence that the business exists, like a business card, a licence or a listing in a directory?

Banking records hold clues.  For example, if the applicant claims they only pay in cash, this could be a sign of trouble.  

Lay down the law from the first conversation with the applicant.  Let them know that you require a tenant background check, a move-in and move-out inspection, report tenant pay habits, collect a damage deposit (if you are allowed), and will be keeping a careful eye on them, and your property. 

Taking a hard line may discourage a dishonest applicant who will fear getting caught in the act.  

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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