Is a Bad Tenant Registry the Answer?

by | Apr 28, 2014 | Tenant Screening

After being scammed by professional tenants, landlords in British Columbia are renewing their call for a bad tenant registry.

A news investigation, prompted by complaints from area landlords, found that in one case a pair of professional tenants have lived “nearly rent-free in at least five homes over the past two years.” News reporters found at least one eviction of these tenants from 2012.

tenant screeningMore recently, these tenants simply ignored the eviction order served by their current landlord.

One landlord says she has lost at least $5,000 so far. The landlord told reporters the couple pushed to move in early. The landlord went out of her way to accommodate the early move, but then the rent and deposit cheques bounced. Now, she wonders if the couple were pushing because they’d just been served an eviction notice.

Another previous landlord won a judgment in small claims court, but now will receive nearly $8,000 of past due rent paid in small installments — not as agreed under the terms of the lease. Even that victory took several hearings and court filings.

Yet another landlord told reporters that these tenants seemed to know more about the Residential Tenancy Act than he did.

Now, a fifth landlord in the series says the law needs to change so it’s not so easy for professional tenants to take advantage of the system.

The case highlights how surprisingly easy it is for tenants to scam landlords, one after the other. Part of the problem is the lack of available information on an applicant’s rental history. Eviction and criminal records can be difficult, if not impossible, to research. In Canada, tenants with multiple evictions may be sheltered by privacy laws. Even if these reports are available, recent actions, like a pending eviction, may not show up in time.

A “bad tenant” registry would be an enormously helpful tool to protect landlords from serial scam artists, but, so far, it has proven a controversial idea. In recent years, attempts have been made to create such a registry, but lawmakers have taken issue with the way information is reported, and how tenants can eventually clear their names.

While that debate continues, landlords can learn from one another’s experiences. For instance:

Always be on the watch for serial bad tenants. These scammers target smaller, more private rental businesses in the hope of avoiding tenant screening that would reveal the applicant’s true nature. That’s usually accomplished by offering to move in right away using bad cheques. Those who want to pay rent in cash could be operating an illegal business. Often, the person will ask that you not call the landlord for some reason or another. Sometimes, a scammer will even dress up and look very professional. Everyone falls for the act. Recently, a woman in California scammed as many as 14 experienced real estate professionals for free rent. After landlords reported her actions, she was convicted of fraud and sentenced to prison.

The only way you can know for sure that your applicant is qualified is to run a tenant background check. Where eviction or criminal reports are inaccessible, a landlord may still find important clues about the prospective tenant in a credit report.

In addition to showing a lack of financial responsibility or dubious employment, the credit report. may reveal addresses or other information not disclosed on the rental application. For instance, you may be able to surmise that the tenant is not typically staying in any one place for one year at a time — the typical lease period.

Always demand a completed rental application. That information may be the only way to locate a tenant who leaves owing money. Also, it’s the only way to cross-check the information the tenant volunteers against the tenant screening reports to determine if the applicant is telling the truth.

Finally, always speak to the previous and current landlords before signing a lease or providing keys to a new tenant.

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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